Important Customers

Do you know who your most important customers are?

I am always surprised that so few of my clients know the answer to this one, and even when I talk to people running much larger companies they go blank.

So the first thing to define is the word “important”  Obvious?  Not necessarily.  Your biggest clients may be generating the highest revenue, but what about the margin or how quickly they pay? Relying on a few big clients is a risky business.

Customer Relationship Management

Once you understand who your good customers are, how do you ensure that you secure repeat business from them long term, building loyal relationships?

Loyal relationships are key to generating profit. There are two important things to understand

💥 Good Customers - these are the ones that are far more important than the average customer. And then there are bad customers that are just not worth having as they cause more aggravation than they are worth

💥 Loyal Relationships - lots of people think about loyalty cards but this is much more than that - it’s when they stay with you even when your competitor is cheaper, they recommend you to their friends and colleagues and trust you like a friend.

Loyal Relationships are based on human interaction which no amount of clever AI or database modelling can replace.

Sounds time-consuming and expensive? Not when you only do it for the top 20% of your clients who deliver 80% of your profit or in other words.the customers that count. 

Relationship Marketing

When I was doing my MBA, I did some consulting work for British Airways as part of my final dissertation.  BA runs a loyalty programme for SMEs called On Business; designed to increase retention, acquire new business, raise switching costs and build relationships with clients. 

I did a deep dive into loyalty and relationship marketing and the importance of having a customer focussed strategy.  The thing is for it to work, they needed to have a customer focussed organisation structure which (at that time at least) they did not.  This is often the problem with large organisations. Of course with a small business it is a whole lot easier.

So where to start?  I am not suggesting you introduce a loyalty programme.  All you need is a CRM (Customer Relationship Management) system.  There are many to choose from depending on the size of your business: Monday, Pipedrive, Hubspot…..

When I ran my travel company we set up our own database which held everything.  The booking system, the hotel contracts,the customer details and we had brilliant reporting functionality built on exactly what I wanted as it was done inhouse.  I decided what information I needed and our IT expert set it up.

Customers generally go through a lifecycle from prospect to first time buyer to early repeat buyer.  At this point they either become a core customer or a defector.  Your core customers are regular repeat purchasers and are critical to overall profitability.   The loyalty of your core customers is earned through strong leadership and culture, leading to loyal staff who put your customers first..

So in my travel company we identified our top 20% customers and classified them in the CRM system as GOLD.  Every time they called to make a booking, their phone number was recognised and linked to the database so the consultant taking the call could immediately see what they had previously booked and any special requirements that they had.

We requested feedback from all of our customers using Trust Pilot and the question we asked was very simple, on a scale of 1-10, how likely are you to recommend us.  Keeping it simple meant a high response rate and an exceptional score.

It’s never too early to start.  In fact if the are starting with just a few customers it is a lot easier, as you can build systems and a database around them.

How to gain repeat customers

Decide who your most important customers are (remember it is not all about revenue)

1️⃣ Split your database based on the top 20% - lets call them gold - you can use other ways to split your database, but keep it simple to start with

2️⃣ These 20% need to receive outstanding service.  The rest need good service - they are still important

3️⃣ Ensure that they can be identified through every touch point in your business

4️⃣ Talk to them & find out exactly what they like and don’t like

5️⃣ Send personalised messsages (I don’t mean the automated Dear x) I mean hyper personalised.  Do they have a family?  Do they play golf? When is their birthday? 

6️⃣ Show them that you know them - not a standardised birthday card but something that shows that you are genuinely interested in them

Creating loyal customers

Why are they so important?

💥 Satisfied customers buy more

💥 Loyal customers share their market knowledge with you

💥 Happy customers may pay a premium price

💥 These customer will recommend you

Customer relationship KPI

How do you know if your customer relationship strategy is working?

👉 Financial

Revenue, margin, cash flow

👉 Customer Satisfaction

We always asked how likely they were to recommend us on a scale of 1-5

.

👉 What is the actual repeat purchase figure?  

Are you measuring this?

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