Your marketing should fall into three stages of the customer journey:
- acquiring new customers
- getting customers to come back more often
- getting customers to spend more each time
But wait! We’ve tricked you…these aren’t in priority order!
The success of your business is not reliant on individual transactions. If every new customer only visited you once, eventually, you would run out of people.
Your goal is to move people along your customer journey. Turning new customers, first timers, a single transaction, into happy, repeat guests. Then, turning those repeat customers into loyal, avid fans who choose your business over all others and refer their friends.
To do this, you must create a system of marketing to capture and nurture every customer that comes to your business.
The third step is where all the money is, the top 10% of your customers and their repeat business. These are not one-time transactions – all your money is made on repeat transactions.
Don’t Make Decisions Based On Your “Feelings”
When you know your actual numbers, you stop making guesses about marketing and your decisions are no longer based on feelings, but facts.
Here’s one of our clients’ sales, segmented into groups based on spending. When you look at their top two segments, you can see that 46.88% of their sales come from 8.44% of their customers. (If you were analyzing your sales, this would hold true for you too.) Since they know these numbers, they know where to best spend their marketing dollars, getting those top 437 loyal, happy customers to come more often, spend more money, and refer more friends.
Your three buckets of marketing must be treated differently because they have different value to your bottom line, and the messages need to speak to that audience. This means the marketing will vary in cost because the return varies.
Focus on turning one-time transaction people into repeat customers. And make decisions based on your relationships with your long-term customers.
What Is the Difference Between Guests and Customers?
A customer implies somebody who buys something from you once. A guest implies somebody you have an ongoing relationship with, like a friend in your home.
If you are a service business like an Auto Repair Shop, or a Retailer of products, as soon as you and your team start thinking of your customers as guests, you treat them differently. Restaurant Owners often do this naturally due to the hospitality nature of their business. Guest implies a higher value, a more personal commitment to serving them, and reminds you that you want them to return.
You can be in the transaction business, where you just sell your products and services to people, or you can be in the relationship business where you develop an ongoing, nurtured relationship that leads to additional visits and referrals.
Royalty Reward® automatically allows you to see exactly who your top spenders are every month. In addition, it calculates your customer’s lifetime value over 5 years based on actual spending. Having these numbers at your finger tips means you make your marketing decisions based on facts, not feelings – which means marketing dollars get utilized to make you more money, not waste it.
If you want some help building that relationship, book a free Marketing Strategy Session with one of our marketing experts who can help you decide what you can do right now to change your marketing and impact your sale and profits.