Profit from customer loyalty

The goal is to get your best customers to return and spend more or buy more frequently.

Increasing a customer retention rate by only 5% can boost the average customer net worth value by an astonishing 35% to 95%, according to recent research by consultant Bain and Company.

How loyal are your customers ?

You will need to know who your best customers are. This may not necessarily be the regular shopper who spends a lot of time in your shop, chatting and spending very little. It may actually be the internet shopper who spends a great deal with you on-line a couple of times a year.

• Spend time looking at who spends most and how often. Cross check this information with the customer details that you have on your database. (For more information on database management read the page on why you need a database).
  
  
• Create three or four categories of customer types with the most profitable at the top and the least profitable at the bottom. You will need to focus almost all of your customer loyalty activity on the top group.
  
  
• Find out what these customers most like about your products or services and what offers or improvements are appealing. You can do this simply by casually asking questions each time they call. When you've formed some ideas, mail a postcard survey to get detailed answers.
  
  
• Make sure that you get enough responses to make a decision about what really motivates these customers to buy. You may need to do more than one mailing.

You should now have a list of top customers along with a list of top products (most profitable) that they buy. This is simply gold dust to you! You don't have to start big with your loyalty activity. Your loyalty activity, including the marketing materials you create to promote, can be very affordable.

Make the most of your research

• Send personalised thank-you messages after each visit or major purchase. You may also include a discount or offer that they can use on their next purchase.
  
  
• If you are measuring the frequency of purchases your customers are making, you may want to send out reminders. Send a letter or postcard with an offer or incentive after a certain period of time during which the customer hasn't bought anything.
  
  
• Use e-mail. E-mail only offers are a great way of communicating with your customer and it's free.
  
  
• Send a gift or a card on an anniversary such as a birthday.
  
  
• Send information about a particular brand or new line that you have that may interest your customers.
  
  
• Send free information or advice. A customer may have purchased an expensive garment or piece of furniture. Sending advice on how to care for this item shows that you care.

For advice and help on customer loyalty activity and campaigns, contact Apple Pie on 01962 732392.