How to Hook and Keep Gold Customers
The adage, “80 percent of your sales come from 20 percent of your customers,” is as true today as when it was coined many years ago.
The real questions are how to identify those prospects and one- and two-time buyers who may have a strong affinity for your merchandise, and then how do you keep them buying? That is, how to turn prospects and one-time buyers into gold customers.
Following are some strategies to test, roll out and then measure.
If They Look Like Customers …
Tactics such as calculating average order value (AOV) and/or lifetime value (LTV); modeling; and segmenting buyers by recency, frequency and monetary (RFM) value offer sound foundations for your gold-customer identification process. Looking beyond those tried-and-true tactics, what else should you focus on?
John Lenser, president of Lenser, a San Rafael, Calif.-based catalog consultancy, and list brokerage and management firm, says ideal customers may include those with the following characteristics:
1.Those who come onto your housefile after qualifying to get a prospect catalog. “Usually those mailed will have a higher value because they were mailed in the first place,” says Lenser. “Perhaps they had made significant direct purchases from a competitor or have model characteristics similar to your best customers.”
2. They came from a prospect list that in the past has delivered high-LTV customers to you.
3. They responded to a full price offer.
4. They joined your loyalty club or program.
5. They are the gender of most of your customers.
6. Their initial orders were more than your AOV, either in dollar value or number of units ordered, Lenser continues.
7. They were not holiday-only buyers, but ordered even in your off season.
8. They did not pay by check, Lenser continues.
9. They did not order just one item.
