December 20, 2017 How to Use Your Best Deals to Create Your Best Customers
Not all customers are created equal. On one end of the spectrum, there’s the customer who uses a coupon from one of those daily deal sites to take advantage of a special offer, and never comes back to buy anything else. (Yeesh!) On the opposite side of the spectrum are your best customers – loyal customers who have made purchase after purchase and talk up your products or services at any opportunity. These customers are your company’s cash cows. In fact 80 percent of your future profits will come from just 20 percent of your existing customers.
In fact 80 percent of your future profits will come from just 20 percent of your existing customers.
So, what of the customers floating in the middle of the spectrum? If they’ve already overcome the hurdle of patronizing your business once, with a little cultivation, they have the potential to become repeat, loyal customers. Use the power of deals, discounts and coupons to turn these “middle of the spectrum” folks into your business’s best customers.
How to target your “middle” customers with your best deals:
1. Personalize deals with data gathered from your customers’ previous purchase(s)
An offer personalized to the needs or tastes of an individual can have a powerful impact. Not only will the recipient feel super special, you can highlight and discount the products they’re most likely to buy. Imagine getting an email that said, “We remember that cute dress you bought a few months back. Here are some great boots to go with it. And, they’re 25% off right now!” Personalizing deals also keeps you from offering incentives where they might fall flat. For example, a free upgrade to an SUV from a rental car company may not mean much to a bachelor traveling solo, but would be the perfect incentive to a family traveling with three kids.
2. Offer exclusive deals on social media channels, your blog or newsletter
Typically, the people who follow you on social media have some interest in your business. They may have heard about you from a friend, or may have already made a purchase from your company. Either way, offering exclusive deals on social media, in a newsletter, or in your blog incentivizes fans and followers where you will have the opportunity to keep your brand fresh in their mind. For example, if you regularly post discounts and promotions on your Instagram profile, you’ll incentivize Instagram followers. These followers will get to learn what your company’s all about – from the types of products you offer, to your company culture and more.
3. Build a points-based loyalty program that rewards repeat purchases
Think of that punch card in your wallet with the 8 stamps toward earning a free coffee at a coffee place. You only need two more stamps to earn that free coffee. Without the punch card, would you be motivated to go back to that coffee place, or would you just get your latte from the most convenient shop? Whereas this type of loyalty program may not help convert first- or second-time purchasers to long-term loyal customers, according to Psychology Today, the points-based loyalty program is extremely effective when customers reach 80 percent of the points needed to earn a reward. Therefore, a customer working toward a reward will spend 20 percent more than a customer not enrolled in a points program.
4. Build a fee-based VIP program
A popular example of a fee-based loyalty program is Amazon’s Prime membership, which costs around $99/year. It may seem strange to charge customers on the front-end to incentivize their loyalty, but 62 percent of millennials said they would join this type of program if their favorite retailer offered one. This type of membership can offer hefty incentives to join, and once your customer becomes a “member,” loyalty is almost always assured.
5. Build an email list of those who have claimed previous deals
Software like Dealkit can help you incentivize email collection by offering discounts and coupons in exchange for a few bits of info, namely a name and email address. The way it works is simple: a company creates a deal to entice buyers. To claim the deal, people who want the deal fill in a simple form and receive a follow-up email with a coupon code. The collected emails are extremely valuable for follow-up marketing: If the deal was claimed and a purchase was made, there’s a twenty-seven percent chance the customer will make a second purchase. Combine that with another discount or deal and their chances of becoming a loyal, repeat customer have been compounded.
6. Offer exclusive discounts on new products or services
When launching something new, ask your customers to try it out, with an added incentive of a hefty discount for being an early adopter. This can be a win-win for your business. Your customer will feel like an insider, and you can ask them for feedback to help you tweak your product or service. Inviting a customer to join your “inner circle,” so to speak, can inspire them to become a loyal customer.
Acquiring customers is costly, and can be a huge drain on your business’s bottom line. Implementing strategies to grow your base of loyal customers is often overlooked. Armed with these strategies, convert your middle of the road customers to consistent, spending machines.