Marketing to your best customers when business stinks
It’s the oldest cliché in business – recession is a time of opportunity. But a raft of research confirms it’s true. People who market aggressively in downturns not only survive but consistently emerge stronger. As Casey Stengel would say if he were alive today, “you could Google it.”
The most aggressive approach to bad times is to figure out who your best customers are and market to them relentlessly. Analyze your customers based on transaction data that’s sitting in your database. It’s going to tell you things about your best customers you never realized.
But beware. Best customers are not just the 5% or 10% who generate the most revenue. In fact, customers who spend the most may already be spending all they can with you.
The wonderful thing about segmentation is that when you look at it carefully you’ll realize that you have at least three kinds of best customers:
- Best revenue producers
- Best growth prospects
- Best worst customers (nope that isn’t a misprint)
These are the customers who will help you through this tough market.
Each of these segments behaves differently, as you can see in the segmentation chart. Your campaigns will be more successful when you market to each segment based on what analysis predicts they’re likely to do next. Sending the same offer to everyone is more than a waste – it can damage your brand among people who see your message as a bother not a help.
Best revenue producers – Let them know how valuable they are. Ply them with offers that will help you retain their business and sustain their purchase levels.
Best growth prospects – Mid-tier customers who often spread their business among suppliers. Market to them to win a bigger share of their trade. If they’re buying a narrower list of items compared with others, your analysis will tell you so. Work to broaden their market basket by identifying products they’re probably buying elsewhere and making offers to win that business.
Best worst customers – New customers who’ve bought once or twice from you don’t rank high, because they haven’t yet generated a lot of revenue. But some of them are destined to be bigger revenue producers if you treat them right. Identify one-time buyers who’ve bought recently and go after them. A second sale is a big step in securing future loyalty.
Forget about your old definition of best customers in 2009, and I believe you’ll be in better shape by year end.