What's Your Type?
By Sandra Pearce, MPA Media Marketing Manager
No, I'm not getting personal. I'm referring to your "customer type". In marketing, we categorize customers as one of four types. Of these, there is one that is highly coveted. It's the one that takes the most work to get and keep, but it's the most profitable. It's the first one on this list.
By the way, you'll understand the picture on the left by the time you finish this article.
The Four Customer Types
Hard Core Loyalist – They buy the same brand or from the same supplier all the time
Soft Core Loyalist – They're loyal to two or three brands or suppliers
Shifting Loyalist – They move from one brand to another for many reasons
Switchers – They have no brand loyalty, they look for deals and bargains or for something different
As you probably noticed the word "Loyalist" is part of all but one of the customer types I listed. That's because loyalty is what customer retention is all about. Of course all of us would like to have a customer base made up exclusively of Hard Core Loyalists but that's just not feasible. And none of us want all Switchers. Successful companies usually have a mix of the top three on the list.
So how many of each type of customer do you think you have? The question you probably have is how do you get more of the really "Loyal" ones? Why, branding of course. That is, after all, why we call it "Brand Loyalty". Brand loyalty can be described very simply: Your customer likes you best. And it's usually for a lot of reasons other than just your products.
True brand loyalty means the consumer is willing to put aside their desire to get the best price and buy based on the brand. Brand loyalty is the ultimate goal of marketing and it's not just about repurchasing.
We as consumers get into habits. And those habits are influenced by what we read, what we see and what we experience. First we're told about a product or company through advertising in some form. We get sold on it for any number of different reasons. The pattern that always emerges in nurturing a loyal customer is that there are many pieces that make up the brand experience and thereby brand loyalty.
There are some business categories that have always understood and embraced branding. Cars, shoes, perfume and soft drinks are just a few. All of these categories have many companies and lots of different price points. But if I were to ask you what brand you prefer, could you give me a completely logical and unemotional reason? Probably not. Let's face it, there are a lot of good products out there and they're all vying for your money just like you are. So why do buy from one company over another? Once you've answered that question, ask yourself another. Did that companies ads have anything to do with you buying their products? And how long did it take them to convince you to buy? On the big ticket items it probably took years.
Typically, the customer who is brand loyal can be a great profit center over time. They typically cost less to serve and to keep. That's why so many large companies have invested so much money in getting and keeping them.
Let's put this into perspective in today's business environment. It's a well-known fact in the marketing world that you grow your market share in a down economy and you grow sales in an up economy. Right now it's not necessarily whether your business is down, it's how far down you are in comparison to your competitors.
The best way to illustrate this is with a little story I read.
Two friends, Tom and Mike, were fishing in a stream. Suddenly Tom sees a grizzly bear on the opposite bank. Tom signaled Mike and they started to slowly back out of the stream. Mike stumbled on his way out of the stream and spooked the bear. They started running and the bear started charging after them. They ran right through their camp and Tom paused to grab his shoes. They ran as fast as they could but the bear kept gaining on the two barefoot fishermen. Tom then stopped running and started putting on his shoes. Mike said, "Are you crazy? The bear's right behind us!" Tom said, "It just dawned on me. I don't have to outrun the bear. I just have to outrun you."
When your competitors stop or cut back on marketing, you have the opportunity to outrun them and grab a bigger share the market. There's still business to be had right now, albeit less than there was a few months ago, but you have a chance to get a bigger chunk of it moving forward. When the economy turns up again, and it will, you'll be first in line to earn the most business.
So the final question is this. Who's going to outrun the bear, you or your competitors?
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