Not all customers contribute to your online business in the identical way. Some construct long-term value through loyalty and advocacy; others drive sales volume through frequent transactions. Understanding the difference is vital to designing a technique that maximizes growth and efficiency.
What is a valued customer?
A valued customer drives a brand’s success through purchases and deeper engagement and loyalty. They:
- Show loyalty, repeatedly selecting the brand over competitors and prioritizing quality and repair over price.
- Advocate, promoting the brand through word-of-mouth and reviews.
- Engage, provide feedback, take part in programs and support brand growth.
- Form an emotional connection, aligning with the brand’s values and acting as ambassadors.
- Drive profitability with high-margin purchases and lower acquisition or retention costs.
What is a volume customer?
A volume customer primarily contributes through frequent purchases but at lower profit margins. They:
- Have a transactional focus, making frequent purchases but lacking strong loyalty, as they prioritize price and convenience.
- Are cost-sensitive, often switching to competitors when higher deals can be found.
- Engage minimally, primarily interacting with the brand at transactional touchpoints.
- Offer limited advocacy, rarely promoting the brand unless there’s a difficulty.
- Impact operations, placing a strain on customer support attributable to high transaction volumes while providing little strategic feedback.
- Drive high sales volume but at lower margins, often gravitating toward commoditized or discounted products.
How do they differ?
Valued customers see the brand as a partner, forming a deeper emotional connection. On the opposite hand, volume customers know the brand as a method to an end focused on transactions with minimal investment in the connection.
Recognizing these differences allows you to nurture long-term relationships with valued customers while maintaining efficient systems for transactional ones. Identifying each type requires a data-driven approach, strategic segmentation and evaluation of behaviors, contributions, and engagement levels.
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Nurturing valued customers
There are several ways to nurture your valued customers, including:
- Personalizing experiences using data-driven insights to deliver tailored offers, recommendations and messages. Reinforce the emotional connection by sending personalized thank-you notes or exclusive content.
- Offering exclusive advantages, equivalent to VIP programs with perks like priority service, early access to products, or premium experiences. Additionally, create loyalty programs that reward engagement, advocacy and repeat business over time (being careful to not create an environment that fosters volume over loyalty/value).
- Engaging proactively with customers by looking for feedback through surveys, focus groups or advisory boards, but don’t forget to act on their input. Anticipate needs through predictive/prescriptive analytics and surprise them with proactive solutions.
- Publicly acknowledging their contributions, equivalent to featuring them in testimonials or case studies and rewarding advocacy behaviors like referrals or positive reviews with meaningful incentives.
- Offering enhanced customer support, like providing dedicated account managers or priority access to customer support channels and resolving issues with speed and empathy, ensuring a consistently superior experience.
Dig deeper: 7 ways to spice up customers’ emotional connection and loyalty along with your brand
Maintaining efficiency for volume customers
While it’s essential to nurture your valued customers, it’s equally vital to keep up efficiency for volume customers. Strategies to achieve this include:
- Streamlining transactions by optimizing the checkout process to attenuate friction and leveraging automation for quick responses to common inquiries or support requests.
- Offering intuitive self-service portals or apps for order tracking, FAQs and straightforward problem resolution, while using AI-powered chatbots for twenty-four/7 support on routine matters.
- Using targeted discounts, bundles or promotions to encourage repeat purchases without overextending resources while implementing loyalty programs which can be easy to affix and reward frequent transactions.
- Communicating efficiently through email campaigns, SMS or push notifications to tell them about deals and updates, ensuring your communication is evident, concise and action-oriented.
- Using analytics to predict purchasing patterns and stock accordingly. Segment volume customers to discover opportunities to maneuver them into the valued customer category over time.
Dig deeper: Unlocking customer loyalty: 5 core motivations powering personalized marketing
Tailoring the client experience for valued and volume customers
Designing the client experience effectively means considering each valued and volume customers. However, the main target, resources and techniques must align with your online business goals, core value proposition and customer base. Different businesses will prioritize these customer types in a different way.
For example, a luxury brand will prioritize valued customers and exceptional service. A reduction retailer will focus on efficiency and price sensitivity for volume customers. A software platform will likely balance each by nurturing valued power users while streamlining processes for casual users.
Focus on valued customers when:
- Your business relies on repeat customers and advocacy, equivalent to subscription services, luxury brands or B2B businesses.
- You have limited resources and wish to prioritize high-margin, long-term relationships.
- You wish to foster brand loyalty or premium positioning out there.
Focus on volume customers when:
- Your model thrives on scale, equivalent to fast-moving consumer goods or ecommerce.
- Margins are lower, but customer acquisition is high and the first goal is transaction efficiency.
- You are in a competitive market where convenience and price are key differentiators.
Focus on each when:
- You have a various customer base, with distinct segments contributing to your success.
- Your brand strategy includes growing each transactional sales and long-term customer relationships.
- You wish to balance immediate revenue with sustainable, long-term growth.
Designing for each means creating a versatile customer experience that supports immediate and sustained success. Valued customers drive growth, while volume customers provide immediate revenue.
Remember, volume customers can develop into valued customers. By encouraging deeper engagement, you can convert them over time. Segment your customers based on aspects like lifetime value, repeat purchases, engagement and price sensitivity. Developing personas will help guide your experience design.
Dig deeper: How to develop a winning B2B ideal customer profile
In closing
Understanding the differences between valued and volume customers is vital to designing an experience that drives immediate results and long-term success. Recognizing each group’s unique needs, behaviors and contributions, is vital to creating strategies that connect with high-value and transactional customers.
When businesses prioritize the proper customers in the proper way, they transcend meeting expectations and create lasting value for all involved.
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