We all want to keep our customers, but which ones do we want to keep the most? Most organisations don’t have the slightest idea who their true high value customers are. It’s obvious that the guy who buys a Porsche is a high value customer. But what about next year? Will he be coming back for the latest model or is he just dropping by for test drives, drinking the free champagne and generally happy to be wooed, without making a purchase for another ten years? Is he really your ideal high value customer?
You might be surprised to learn that an entirely different customer represents a much bigger value to your organisation over the course of his lifetime. It is entirely feasible that the thirty-something who has just signed the purchase agreement on his first house and buys a nearly new BMW hatchback is much more valuable to you.
By next year he could be back for a rooftop box and car seats, and his wife for a station wagon as their newborn twins come with buggies and bags and bottles that all need ferrying around. And as soon as he’s had that promotion at work, he’ll be looking to replace his car with a new model. Are you treating him like the high value customer he has the potential to be, or does he spend 20 minutes on hold when trying to book an oil change? Are you missing an important opportunity to cement his loyalty?
“By investing in a customer’s overall lifetime value you create a much more sustainable revenue stream.”
You can discover a lot about who your true high value clients are by simply examining the data you already own. The most basic of data can already be enough to populate a migration matrix that will help you identify a customer’s lifetime value. It can show you why last year’s high value clients have become medium value clients and which mid-level clients have the potential to become high value clients. This in turn allows you to identify your next best action and change course accordingly.
Most organisations are sitting on a wealth of data but fail to turn it into actionable insights. Understanding your customer allows you to stay on top of your marketing actions with targeted products and marketing messages that make the customer feel valued. No one enjoys receiving yet another mail shot that is of absolutely no relevance to them. But when you reach out to customers with offers that are pertinent to them you start creating a more sustainable revenue stream.
Acknowledging your clients’ importance now and in the future is a great way to attract and retain their interest. More importantly, you start closing the loop with every new transaction: you gain better insights, which in turn help you create even better proposals. Clever marketing is all about value creation, so why not start creating true value for those you value the most?