Customer Retention: Keep ‘em Coming Back for More
Missing Person Description: high-quality multichannel buyer
Last Seen: purchasing online 18 months ago
The Details: A customer placed an online order for top-quality merchandise 18 months ago. Delivery confirmation was received three days later. Your repeated attempts to contact the customer via direct mail and e-mail have been met with no response. This customer is extremely valuable, with a high lifetime value and history of repeat purchases. Please forward any information as soon as possible.
Do you know which customers are missing in action? Somewhere deep in your housefile are people who no longer shop from you. For some, service and quality issues alienated them. Others have simply gone quietly, leaving without complaint or fanfare. E-mails are unanswered, and catalogs are ignored. Maybe they’ve completed the lifecycle for your merchandise, or they’re just taking a break from shopping in general.
As a smart marketer, your first task is to identify which customers have gone missing. Key metrics such as attrition and acquisition rates are great performance indicators. Unfortunately, they don’t identify specific customers and their value to your business. As you know, not all customers are equal, and your business intelligence is failing if it doesn’t distinguish between buyers. Acquiring low-quality customers to replace valuable ones buys you a one-way ticket to bankruptcy. Understanding your customer profiles and knowing which ones to keep or let go is mandatory.
Costco Gets It
Recently I let my Costco membership expire. Since my relocation three years ago, the closest Costco is almost three hours away. I know I don’t qualify as a platinum customer, but I do have a steady purchase history.
Costco has a great Web site, and I do often travel to areas with Costco stores. In the past, I usually renewed my membership when I was in the store, but three weeks had passed since the expiration of my last membership card. At Costco, alarms went off. Its ‘customer lifeguard’ called, and the message was simple: Costco missed me.