All customers are not created equal. In many retail businesses, the age-old “80-20” rule applies: 80% of your income comes from 20% of your customers. Consider your own business. Naturally, it’s important to try to bring new people in the door. But are you also doing everything you can to keep and maximize the clients who currently account for the bulk of your business?
The days of conspicuous consumption may have passed, but well-chosen symbols of success and status are still important to today’s affluent customers. Consumers come to you with a passion for the unique, in both product and experience. If you can meet their needs and exceed their expectations, they will join the ranks of your best customers.
Once you know who your best customers are and what they want, communicate with them regularly.
Who are they? Your best customers are your most loyal and, when managed properly, your most profitable. Here’s a profile of the top echelon of your customer base:
They buy more often. They’re more likely to think of you for small occasions as well as major ones. They’re also more apt to purchase jewelry for themselves.
They spend more money. Generally, your best customers are already sold on the value represented in your store, so they’re more inclined to buy above your average sale.
They take less time. They rely on your guidance and your knowledge of their gift patterns, tastes, and quality standards to help them make decisions quickly. That raises your sales-per-hour figure, freeing up time for you and your sales staff to create more business.
They refer other customers like themselves. As a rule, your best customers take great pride in their jewelry and are likely to tell friends, neighbors, and acquaintances where they bought it. These others often are similar in income bracket and buying habits, potentially adding to your best-customer pool.
They are less price-sensitive. Your best customers expect to be treated fairly and demand value – but they are less inclined than the average customer to equate value with price.
They carry no “acquisition cost.” Once you’ve earned their trust and respect, they’ll keep coming back regardless of advertising.
They tell you about problems and are quicker to forgive. Your best customers will usually bring problems regarding your products or service to your attention quickly, giving you the opportunity to rectify the matter.
This top stratum of your customer base is critical to your continued growth. Building their loyalty can present a challenge when you’re also catering to the other 80% of your clients. You need to find new and unusual ways to surprise and delight them every day.
A best-customers strategy. The first step is to find out who your best customers are and what they want. Consider using a survey to identify the merchandise interests, service expectations, and purchase patterns of affluent consumers in your area. A local marketing firm can help you compile the survey.
Commercial mailing-list companies can aid in detailing the demographics of your market and in segmenting your area according to your specifications. Often, you can buy lists sorted by specific demographic characteristics such as income level, zip code, age, or occupation. You might also consider building a list custom-suited to your needs. Though this is a more costly option, many marketing firms can provide a detailed analysis of your existing best-customer profile and then build a list of those likely to fit that description.
Consider offering an incentive for people to complete your survey. Service incentives such as a gift certificate for an appraisal tend to mean more than merchandise discounts to this target group. Even with an incentive, however, don’t expect more than a 20% to 30% response. Make sure you mail to a large-enough sample to obtain useful information.
Once you know who they are and what they want, communicate with them regularly. A direct-mail newsletter is an effective way to do this. Let them know you’re paying attention and that you have what they’re after. Appeal to the emotional triggers that motivate all customers to buy, but highlight the parts of your business that apply particularly to this group. Mention specific brand or designer names; also include quality assurances, the history and reputation of your business, or customer testimonials.
Create incentives and services specifically focused on your best customers. Serve as a trend-spotter. For example, you might use your newsletter to highlight a new or unique gemstone, designer, or fashion direction. You might also present information on service offers or how to care for jewelry.
As part of your strategy, identify other retail businesses that are likely to draw from the same best-customer pool. Work with other purveyors of luxury items in your area to attract and share customers. Consider holding jointly hosted parties, giveaways, or community-service events.
The personal touch. Attentive follow-up and personal service are critical in maintaining the loyalty of your best customers. Set up a system for capturing relevant personal and service information. Establish standards for client follow-up by such means as satisfaction calls, thank-you notes, and special-occasion reminders. Stress among your sales associates the importance of listening carefully to your best customers. Encourage creativity in coming up with new ways to exceed customer expectations.
Every staff person and every aspect of your business should be geared to maintaining and maximizing your best-customer base. Your sales and profits will reflect the fruits of your efforts.
Janice Mack Talcott and Kate B. Peterson are the principals of Performance Concepts, a company that trains specialty retailers.