Recently, I was talking with a couple of executives at a rather large corporation and the topic of ‘best customers’ came up. So I asked “Who are your best customers?” and was rather surprised to hear [a] a long pause, and [b] completely different lists.
So I asked “How do you define ‘best customer’?”
Again, long pause and completely different answers.
You can’t attract more ‘best customers’ if you can’t define what a ‘best customer’ is!
For many businesses, a recency-frequency-monetary (RFM) analysis is a great first step. Some will want to include profits either in place of or in addition to monetary since you can have some huge dollars and low profits associated with some accounts. (You gotta love those volume discounts, don’t you!?)
Once you know, how can you get more just like ‘em?
A good next step is to take the top tier from the RFM analysis and overlay data – demographic and psychographic for consumers, firmographics for businesses. This will help identify segments with your audience – and this can help you target more effectively so you can increase conversion rates, retention rates, order size and more.
But don’t stop there – talk with individuals within each segment through in-depth interviews and surveys so you can better understand needs, wants, motivations, perceptions, buying process and more. This is the level of insight that will allow you to identify true opportunities to improve marketing and sales performance by attracting higher quality leads and driving higher conversion rates because you will be able to target more effectively and offer stronger, more motivational messages and offers.
