You have three seconds to answer this question:
“Who is your best customer?”
Time is up.
Do you have a name? Yes, I’m asking you to identify your best customer by name without looking it up. If you know your best customer by name, then you are probably taking good care of your business.
But, if you don’t…
…stop wondering why it’s so hard to find and keep good customers. The first step in finding them is knowing what they look like. And, the easiest why to know what they look like is to look at your best customer.
You can’t do that if you don’t know your best customer. Let’s move on to question number two:
“What defines your best customer?”
The answer isn’t as simple as one might think. Your best customer is the one that sustains your business. It is a combination of sales, loyalty, longevity, and profitability. These factors work together to identify the person who consistently supports your company. Others may buy more or more often, but if they don’t have the right mix, they aren’t the best. Look for:
Sales – Contribution to revenue
Loyalty – Purchases consistently throughout the year
Longevity – Has been a valued customer for multiple years
Profitability – Sales less returns and marketing/operational costs
Any of these items could identify a good customer, but the best one will have them all.
Once you’ve identified your best customer, look for characteristics that will help you identify similar customers and prospects. Here are some questions to get you started:
How did you acquire him or her (direct mail, advertisement, referral, social media, etc.)?
What are the shopping preferences (categories, single or multichannel, seasonality, etc.)?
When was the customer acquired (month, season, promotion, etc.)?
You’ll have more questions as you find the answers. When you are satisfied that you have a good profile of your best customer, look for other like him or her. Are they following the same buying patterns and trending towards becoming the best?
If so, you now know how to identify people that resemble your best customer, where to look, and the best promotion to motivate them to move from shopper to buyer.
Once you know how to find the people most likely to become great customers, the next step is keeping them happy. Our next post is about how to retain them. Click here to read it.