Help Generate Additional Revenue With High-Spending Customers
Segmenting your customer base into low- and high-spending customers is standard procedure for most sophisticated marketers these days. But the way you segment customers can have profound impacts on your year-over-year revenue growth.
Identifying and cultivating your high-spending customers will naturally tend to multiply their purchase activities with you — which is far preferable and more lucrative than nurturing customers who tend to spend less.
Analyze spending patterns
To achieve the most revenue growth, cut right to the chase and analyze your customers’ likely spending patterns. This makes it easier to focus most of your attention, as well as your marketing efforts, on the high-spending customers who are most likely to deliver additional revenue.
One simple method of segmenting customers is by grouping them into separate buckets, such as the following:
Group A: High spenders who are very loyal to your company’s products and services
Group B: High spenders who are minimally loyal to your company’s products and services
Group C: Low spenders who are very loyal to your company’s products and services
Group D: Low spenders who are minimally loyal to your company’s products and services
In this analysis, Group D deserves very little of your marketing dollars and attention. Group C deserves more spending and attention, particularly in the form of promotions and other carefully targeted efforts designed to encourage customers to spend more with you.
Group B deserves even more of your marketing dollars and attention, with a focus on retaining their business well into the future. You should offer a rewards program to this group to incentivize business while making sure to solicit feedback to identify the most pressing points of dissatisfaction before these customers begin making their purchases elsewhere.
Group A, however, should be your prime candidates for marketing dollars and attention.
These high-spending customers deserve:
- Regular attention and maintenance
- Fast, personal attention when they place an order or voice a complaint
- Close monitoring of their purchasing behavior so you can detect unusually large delays after their last purchase from you
- Other incentives, including rewards for loyalty and scheduled coupons or other incentives to buy that nurture both their loyalty and their frequent buying behavior
With your marketing dollars and attention focused in this way, the likely result will be expected levels of attrition in Group D and reduced attrition in Groups B and A, who are precisely the groups that will maintain or increase their spending, year-over-year.
By focusing on attracting new customers who are relatively high spenders, you’ll tend to generate more revenue growth than you would from any strategy that does not account for the spending habits of your customers.
Image source: Flickr
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