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Jan 22, 2019
4 minutes read

The 80/20 rule: Who are your loyal customers?

The “80/20 Rule” as it is frequently called today, is an incredible tool for growing your business. If you can figure out which 20% of your time produces 80% of your business’ results, you can spend more time on those activities and less time on others. Likewise, by identifying the characteristics of the top 20% of your customers (who represent 80% of your sales), you can find more customers like them and dramatically grow your sales. However, many companies invest more in attracting new customers than retaining loyal customers. How is it that we no longer spoil loyal customers? Imagine what encouraging loyal customers can mean for your conversion! But how do you find out who your loyal customers are?

Stimulate loyal customers vs new customers

You’ve heard it before. It’s cheaper to get your existing customers to make a repeat purchase than it is to find new customers, and it remains true for many businesses. When was the last time you made an effort to re-engage customers to get them to come back. Well now is a good time to build that customer retention strategy.

Your current customer base is the best asset your business has. Customers already know your brand, they know your products, and they appreciate your service. Similarly, you already know more about them, and you can use this data to personalise their experience.

Focusing your time and energy on improving the experience for this group as oppose to always trying to find new customers can be a powerful way to supercharge revenues. But how do you effectively respond to that? By responding to the needs of the customer, you ensure that the customer feels more familiar with your brand. You build up more and more with each interaction so that it really becomes a relationship. The stronger the relationship becomes, the more a customer will spend, and the more loyal they will become.

What is striking, however, is that on average only 25% to 35% of the marketing budget is spent on loyal customers. The majority of the marketing budget is spent on attracting new customers. Doesn't loyal customers deserve more attention?

Recognise loyal customers

Loyal customers deserve more attention. but who are my loyal customers? This used to be easy to determine. If a customer had made several purchases in the grocery store on the corner for example, he or she was soon recognised as a loyal customer. Nowadays we are dealing with a whole spectrum of possibilities. For example, a customer can make purchases online and offline, in multiple stores. We have loyalty cards, reactions to campaigns, app use, etc. All aspects that we would like to take (and have to take) in the weighing of loyalty.

Loyalty can not be determined by looking at one source. Loyalty is the sum of all data sources in which customer data live. This makes it difficult. How do you gain insight into customers if you need aspects from different sources?

360 ° customer view

A Customer Data Platform (CDP) solves this problem. A CDP ensures that you can combine, add and analyse information from different sources. By linking the important sources for your brand or company, you get one clear profile per customer. This is the 360 ​​° customer view. A profile that not only combines customer data, but also shows what actions a customer undertakes. For example: a customer first buys a product offline, then responds to a mobile campaign, and then buys a product online. We store all these activities of the customer and we can use them to determine whether we find the customer loyal. 

With preset standards we can give each of the activities a value. This value counts up with the profile. For example, if a customer exceeds 100 points, we can label him or her as loyal. All customers with more than 100 points are brought together in the "loyal customers" segment. This segment can give you that extra attention that loyal customers deserve.

Be creative and reward your customers with relevant and personal campaigns. Think of all the Omni-channel communication possibilities that are available. For example, use a discount code that only applies to loyal customers. If they don't respond to email, send an SMS with a landing page to let them know that a nice promotion is waiting for them. This gives the customer "just that little extra" which makes it feel like a relationship. All of this creates, analyses and automates via your base: The Customer Data Platform. 

In a nutshell

Loyal customers don't always get the attention they deserve. That's because recognising loyal customers is difficult. A Customer Data Platform ensures that you really get to know your customers. Do not limit your view to a single data source, but include all important elements from different data sources. This shows you who your loyal customers are. These are the customers that you can get more from. Cherish them, and encourage them to make more purchases with extra nice promotions and relevant campaigns. Because your CDP is the basis, you can use all omni-channel marketing channels to give your loyal customers the customer journey they deserve.

Would you like to know more about the possibilities of a Customer Data Platform?

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