Net-A-Porter is one firm that does a great job of looking after its key customers. It has a name for them: ‘extremely important person’ (EIP). Like VIPs, only with an E instead of a V.
These customers account for a disproportionately large chunk of sales and profits, and boy do they get looked after.
EIP orders are picked, packed and despatched first. EIPs get first dibs at new products (some of which are very limited). EIPs are assigned personal shoppers and invited into the London office for wardrobe planning, and they receive personalised lookbooks (these customers "spend 20 times more than the baseline"). EIPs see exclusive previews and presentations, and they have products bought specifically for them by the buying team.
All in all, it’s good to be perceived as an EIP. The question is whether you know who your EIPs are, and whether you’re treating them any differently, to make them feel like the special people they are?
So, how many of your customers are ‘extremely important’? If you don't really know then look through your data (e.g. customer database, web analytics, social media monitoring tools, etc) to find customer segments in the following areas...
These customers are not price sensitive. They spend considerably more than the average buyer. Their basket values are higher and they have the potential to become repeat customers, and to shop more often. It goes without saying that you want to be wrapping up these big spenders in cotton wool.
Make no mistake, these are your EIPs. It’s essential to find out who your most long-term customers are (look for customers with the highest lifetime value), and to understand how and why they buy from you, in order to try to push more people into this bracket to drive up average customer lifetime value (ACLV – my very favourite KPI). The smartest companies focus on customer retention because it’s so very profitable.
These customers buy frequently. They may be habitual shoppers, using your website every Saturday, or every time payday comes around. They may be deeply passionate about the products themselves, for example fashionistas, or buyers who purchase at scale for whatever reason.
You can also identify existing customers who spend the most time on your site, as well as visitors who may not be buying so much from you right now, but who may do so in the future. These people spend a long time on your website, browsing, bookmarking and sharing your products. Remember that highly active vistors have the potential to become the right kind of customers, and may be advocates for your brand or product prior to buying from you.
Everybody loves those customers that happen to buy the most profitable items that you sell. You should know which of your products deliver the highest margins, and consider grouping them into bands. Customers who buy from these price bands are gold, and should be treated accordingly.
These customers buy without any friction. They are hassle free, and do not burden the business with calls to the customer service team. They are not serial refund requesters. I’ve known firms that identify high maintenance, low profit (or worse, loss making) customers, and actually deliver increasingly poor levels of customer service, in the hope that they’ll go away. Watch out for pesky high maintenance, low value customers!
People that actively and consistently say good things about your brand are to be cherished. They love your products and services, and they’re that much easier to please. Given that 52% of shoppers say that recommendations are ‘influential’, your advocates should be a vital weapon in your marketing arsenal, and a cheap one at that (consider dedicating a small slice of your marketing budget to keep them happy). I sense that shoppers who buy based on recommendations are also more likely to themselves recommend brands to their networks, so this is an area potentially set for exponential growth in the years to come. What percentage of your customer base would you classify as ‘advocates’? That might be a tricky question for you to try to answer…
Advocates become even more important when they’re influential, as do your other customers (who you’d deeply love to become advocates, especially given their influence). You might consider customers to be influential because of what they do for a living, or because they’re well connected, and / or have a large social media footprint.
How else might a customer be considered valuable? How have you gone about identifying your EIPs? Do you treat them differently, and if so how?