How much is a loyal customer worth to you?

By Carol Worthington-levy

Most multichannel sellers have a small group of extremely loyal customers who buy year in, year out, or come back annually making substantial purchases. These are your biggest fans, and you'd be surprised to realize how much more they spend than your other customers, and thus how important they are to you.

Yet often these customers are treated no differently than the balance of your housefile. The point: Customers who aren't loyal can occasionally be swayed by being treated as best customers, but most of the time it makes you look asleep at the wheel to do so. They know, as you gush about their loyalty, that they're not.

But if you cut out the bogus "loyalty" messaging to those who don't deserve it, instead targeting your truly best customers with meaningful messaging, that investment in time and money would not only be more honestly conveyed, but also more profitable for you.

The critical issues with respect to customer loyalty are twofold: First, how do you determine who's REALLY loyal? Do once-a-year customers slip through the cracks if their purchases are high? Do small-purchase customers get ignored, even if they order five or more times during the year?

And second, what do you do to make your best customers feel appreciated? Let's look briefly at both of these points.

Determining your best customers. Depending on the condition of your marketing database, you may have a hard time determining your different classes of customers - including a few different criteria for "best customer" - without literally handpicking them from your list. Who has time for that?

If you want to mine the golden opportunities available in remarketing to your biggest fans, have a true appraisal of this. This means using a solid relational marketing database to make it faster, easier and more accurate.

So, this is one of the best reasons EVER to have a review of your current database to see if it's up to speed.

Many companies have old databases that have poor reporting or are inconvenient from which to get reports. This isn't good enough. You need access and information at your fingertips to explore and plan.

Many pure-play internet retailers don't have a good enough relational database. Yet Overstock.com says its database is one of the most valuable elements of its business - a lifeline to continued customer relationships and better sales. That's because it's more than just names; it's access from all sides to what those customers are doing, profiling buying behavior to determine opportunity.

Rewarding your best customers in a meaningful way. Marketers often "reward" best customers with more emails or more catalogs. This benefits you, but is it good for them? What can you do to keep these loyal folks from feeling like you're "hitting on them" again and again, rather than rewarding their loyalty? Here are three ideas:

Email: Show your best customers you really appreciate them. If you send them a special sale email for "Our best customers ONLY," really mean it. Tell them they're the top 1 percent, the cream of your crop, and give them a really terrific bargain. Make reference to some of the items they've purchased in the past to show you really know and appreciate them.
Web: Offer best-customer access to great content on your site. Create a "registered gold members ONLY" section that has some appropriate added-value information, advice, guidelines, recipes, etc. - something to thank them instead of asking for more money. They'll thank you with more purchases.
Award "Gold Customer" status with a Gold Customer number and subsequent special offers such as free upgraded shipping. Or give them occasional small, special gifts. Implement this program across all your channels so even retail customers are recognized. In large metropolitan areas you could even have after-hours store events for Gold Customers.

Even if you're feeling hammered by the weak economy and so many other decisions that'll cost you money, now is the time to implement these strategies. It's always a good day to tell your top-tier customers you really appreciate their patronage. And they'll tell others, who will want to shop with you, too.

—Carol Worthington-Levy, partner, creative services, LENSER (carol.worthington-levy@lenser.com).