Spend Less And Make More With A New Customer Strategy - Lift361

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Spend Less And Make More With A New Customer Strategy

By Ed Higdon. Posted in Action

September 10, 2014

If you can get a customer to return once, they’ll return again. Let’s say half of your customers are satisfied enough, or loyal enough, to come back to your store a second time. Statistics show that, of that 50 percent return rating, 70-to-80 percent will come back a third, fourth and fifth time. For many businesses, encouraging customers to take that first leap is the hardest part of customer retention – because they don’t have a customer strategy in place.

If your marketing program revolves around blanketing your customers with one-size-fits-all promotions and advertising, you’re unlikely to see any significant growth, since you’re basically leaving your numbers up to chance. The trick lies in categorizing your big data collection.

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How To Choose Your Targets

With enough personalized customer data, including what they’re buying and when they’re buying it, you can determine which customers are likely to return to your store and which you’ll never see again. Sorting this data is as easy as creating a decile system—a numerical score rating a consumer’s likelihood of returning to your store, where one is the most likely and 10 is the least. In this system, numbers one and two are your most valuable customers; anyone between three and six earns a different amount of focus; and anyone from seven to 10 is unlikely to come back. This makes optimizing your ad budget much clearer, because you are investing in the high opportunity customers– the ones most likely to offer you repeat business.

Once you’ve sorted out your clients into a system, and once you set up a system that allows you to pull and sort customers in real-time, you can focus your resources on customers who are most likely to respond—without spending any more money. This doesn’t have to stray far from your pre-existing marketing strategy, so long as it’s honed towards the people who you are certain will listen to and appreciate your message. You can remove the customers you know will not return from your messaging list, saving you money on these campaigns.

Fix The Leaky Bucket

Think of your store as a bucket with a hole in the bottom, where water—your consumer base— slowly leaks out.

As a retailer, you can’t focus exclusively on filling your bucket with new water. You’ve also got to close up the hole at the bottom as much as possible. By focusing on customers who’ve already bought something at your store, you can start to identify critical points in consumers’ lives and pinpoint when they might be likely to make new purchases. Once retailers understand their customers’ lifecycles, they can combine this information with a decile scoring system to optimize their advertising budget and increase a loyal baseline.