The 1 Thing You Must Do To Win Loyal Customers

Not all customers are the same - don't treat them that way!  See below for tips on how to make all customers more loyal.

Not all customers are the same - don't treat them that way!  See below for tips on how to make all customers more loyal.

The first step to solving any problem is admitting you have one.  Guess what: no one marketing program will work for all your customers.  Guess what else: not all of your customers are loyal and your loyal customers aren’t your most important customers. To win more loyal customers, you must market to your customers differently.


What Kind Of Customers You DO Have

No matter what business you’re in, all of your customers fit in one of three buckets:

  • Loyal, repeat spenders
  • Occasional spenders
  • Rare or one-time spenders

Thanks to the 80/20 rule (also know as the Pareto Principle), we know that, in general, your total customer base, by percentage, breaks down this way

  • Loyal, repeat spenders = 1% of total customers
  • Occasional spenders = 19% of customers
  • Rare or one-time spenders = 80% of customers

And in general, your revenue breaks down this way:

  • Loyal, repeat spenders = 15%
  • Occasional spenders = 65%
  • Rare or one-time spenders = 10%

Looking at this all this information together, we can see:

Customer SegmentTotal % of CustomersTotal % of RevenueMultiple Value
Loyal1%15%15x
Occasional19%65%3.4x
Rare80%10%.13x

How Much Is Each Type of Customer Worth?

Let’s assume your average ticket price is $30 and your average frequency is 1.5x per month.  If you have 1000 customers and, following the above table, 10 of them are loyal and 190 of them are occasional.  Let’s assume your loyal customers come 4 times more than your occasional customers.  That means that your revenue from each customer base looks like this:

Customer SegmentMonthly RevenueMonthly Revenue Per Customer
Loyal$1,800 (10 customers*#30 * 6 visits/mo)$180
Occasional$8,550 (190 customers * $30 * 1.5 visits/mo)$45

What’s clear is that your loyal customers, per customer, are worth a whole lot more.  But as a group, they are worth less than your occasional spenders.  The challenge is that there are more occasional spenders and it is harder to boost their loyalty since they aren’t as married to your business.  Here’s how to take advantage of all this.

What loyal customers want:

  • To feel special
  • To feel like you know them

Which marketing technology gives loyal customers what they want:

1.  A restaurant branded mobile app

  • You can offer them specials directly to their phone (so they feel special)
  • You can relate those specials/rewards to their spending habits (feel like you know them)
  • You can personalize the app with their name
  • Your brand can inspire their thinking (e.g. a push notification for a coffee will make them crave coffee because they already love you)

What Occasional customers want:

  • To be delighted
  • Good deals

Which marketing technology gives occasional customers what they want:

1.  Email marketing

  • You can reach out to them to surprise them with fun/meaningful messages
  • CAVEAT: must be personalized or else it will feel generic and annoy them

2.  Conversion Marketing

  • You can offer specials when they are thinking about you
  • You can store information about them to surprise them with personalized emails
  • Your brand can win their business when they are thinking about what you offer (e.g. a claimable special when they visit your website…they are already hungry, they will choose you this way)

What rare customers want:

  • Convenience - People who don’t come frequently are coming now because they are either testing you out or you’re the most convenient option offering what they need.

Which marketing technology gives rare customers what they want:

1.  Daily deals

  • People can try you out without overspending for something they aren’t familiar with
  • CAVEAT: only offer daily deals to new customers only…you will get many customers who don’t come back, but a few might…and they become very valuable (see above)

2.  Website + SEO Optimization

  • Allows you to be found online

3.  Local Listing Sites

  • Allows you to be found online

For more tips on customer development, see:

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