Contributions to Profit: Plan For 2007 and Rank Your Customers, Prospects
This is the first of a three-part series. The other two installments will appear in November and December 2006 issues.
As you develop your marketing plans for the coming year, look at all of the different prospect and customer groups, and build a plan for each group. There are five different types of prospects and customer groups: advocates, buyers, triers, prospects and suspects, based on a behavioral perspective. In the first part of this series, I’ll define these groups; in the other installments, I’ll offer some actionable plans to help you increase your profits next year.
1. Advocates. These are the long-term customers who have the highest lifetime value, spend the most amount of money with you and have the highest profitability. They’re the cream of your customers and will recommend your product/service to others, as they have a strong connection to your brand built over time. Carefully define, identify, communicate with and keep this group loyal.
2. Buyers. This hierarchical group of customers who purchased two or more times also is called two-plus or multibuyers. They’re loyal to your brand, but if there are changes to quality and service levels in your company, they could easily defect. Keep track of this group’s purchase (or non-purchase) trends; it’ll help you define your future plans both from a circulation and merchandising perspective. In most companies, multibuyers generate the revenue that drives contribution to profits and funds prospecting efforts.
3. Triers. These new customers, also called single or one-time buyers, have made their first purchase with you. They’re “trying out” your products, your company and your service, but haven’t made a commitment to your brand.
4. Prospects. Obviously this group is made up of people who haven’t yet purchased from you, but fit in your defined target market. They could range from information and catalog requestors to names not yet mailed on a list that you have yet to roll out to, or names on other lists in your category that you haven’t tested yet.
Jim Gilbert has had a storied career in direct and digital marketing resulting in a burning desire to tell stories that educate, inform, and inspire marketers to new heights of success.
After years of marketing consulting, Jim decided it was time to “put his money where his mouth was" and build his own e-commerce company, Premo Natural Products, with its flagship product, Premo Guard Bed Bug & Mite Sprays. Premo in its second year is poised to eclipse 100 percent growth.
Jim has been writing for Target Marketing Group since 2006, first on the pages of Catalog Success Magazine, then as the first blogger for its online division. Jim continues to write for Total Retail.
Along the way, Jim has led the Florida Direct Marketing Association as their Marketing Chair and then three-term President, been an Adjunct Professor of Direct and Digital marketing for Miami International University, and created a lecture series, “The 9 Immutable Laws of Social Media Marketing,” which he has presented across the country at conferences and universities.