Do You Know Your Most Valuable Customers? Do they know that you love them?
It’s 10 times harder to get a new customer than to keep an existing one. Loyal customers are more profitable and have the highest Lifetime Customer Value. They love your company already. They have already been acquired, qualified and taken through the funnel – – you have them where you want them!
So why, with today’s sophisticated customer management systems, are loyal repeat customers too often just an afterthought? Or missed entirely?
In today’s post we will try to demonstrate that marketers must make extra effort to identify and appreciate these great customers.
Customer Relationship Management (CRM) data-based systems have given marketers the illusion that they not only know everything about their customers, but that their email outreach perfectly motivates everyone. This is not always the case. They don’t always get it right. Customer targeting algorithms written too narrowly can miss the bigger picture.
Case in point: my very own Mom.
- Mom’s primary indulgence is periodically taking her 5 kids and their families (20-25 people total) to an all-inclusive resort. Club Med has been the most frequent (but not exclusive) beneficiary. (Yes, I chose my mother extremely well). Her aggregate investment is well into 6 figures over the past 20+ years she’s been doing this.
In the case of Club Med, the algorithm failed. They were focused on the last 3 years only. And they completely missed the fact that she’s a long-time customer who brings a group. Mom turns out to be a mere Turquoise! A rookie in their eyes!
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- Mom selects the location, makes the reservations and all expenses go through her. She has 99% of the decision-making power on where we go. She should be a Big Kahuna to Club Med. They should make sure she’s happy, show their appreciation, and make every effort to acknowledge her loyalty.
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- Yet Club Med scores loyalty on a per-person visit basis over the last 3 years. So despite influencing a lot of spending, Mom is classified as entry-level Turquoise, with the same status as a 10-year old who goes along with her parents. There is no acknowledgement at the corporate level, and none at the local Club level – – no one has told them who this is. No bottle of wine or fruit in the room. No upgrade. No ‘thank you for your continued loyalty’. Nothing.
- Small victory! But it took a lot of effort. Shouldn’t have to.
- What defines your best customers? Longevity? Frequency? Cumulative $ spent? Early adopters of new products? This is really important to figure out.
Club Med of course doesn’t want to ignore their best customers. It’s just that their system isn’t set up to recognize them all the time. To their credit, they handled my email rant with grace – – and came through in the end.
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So figure out who your best customers are and take care of them!
Right after you take care of your mother.
The Armchair MBA 