Identifying and Keeping Your Most Valuable Customers

“Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.” – William Deming

Most companies excel at being able to calculate their revenue and overall profit. However, ask them if they know which of their customers are contributing the most to that profit, and there would possibly be met with befuddlement or a mute stare. It is a critical and potentially damaging mistake that many companies make of not being able to identify their most valuable customers. If you cannot identify them, you would most certainly be unable to retain them. It does take time, effort, and some resources to identify, and monitor the behaviour of customers, and especially the ones that contribute heavily towards the company’s bottom line. A simple check – a customer that pays regularly and on time would qualify as a valuable and profitable customer, as opposed to one who needs regular reminders and makes your company wait for days before paying.

It may seem counter-productive to focus only on the company’s most valuable customers, since every business today seems to be struggling to gain and retain any kind of customers. However, it is true that every business would have customers who would more profitable and valuable and there could be a variety of reasons for this. Some customers are just easier to deal with and manage, while some would provide huge and repeated business, and there would be others who not only provide business but also enthusiastically promote the company, encouraging others to become customers too. The success of a business comes from being able to identify and keep these most valuable customers, build strong bonds, and forge emotional connections with them. The other benefit of such customers is that, the referrals they provide would be of people similar to themselves.

We have said often that no company can succeed or even begin to serve customers without a complete understanding of them. The more a company knows about its customers, the easier it would be to sell to them by identifying their reasons and requirements. Knowing your customers would enable your company to send them appropriate and relevant information and offers, and through proper segmentation of current customers, your company would be able to target similar customer profiles, thereby enhancing the chances of converting them. The information a company collects and collates about its customers, not only improves its efficiency, but also helps it to ramp up its customer service and create customized products and solutions. Through in-depth information about the customer base, a company can know and retain its most valuable customers, and find ways to do away with problematic and low value customers.

Customer information is a sea of benefits for any company. A centralized record of such information helps a company to speed up transactions, reduce wait times, provide tailor-made offerings, ensure personalized treatment, identify and resolve customer problems, and overall give customers lasting and memorable experiences. The better a company becomes at providing such experiences, it enhances its chances of retaining its most valuable customers, while creating more such customers. In addition, understanding one’s customers ensures that a company can save huge costs by planning and allocating the resources at its disposal in the most appropriate manner. By linking this information to other aspects of business like stock keeping, inventory, procurement, and others, a company would notice a significant increase in profitability owing to reduced wastage and expenses. The fact is that customers tend to stay with companies that seem better organized and appear confident in everything they do. Customers trust and depend on companies that are able to give them what they want and when they want, and over time become the most valuable customers for a company.

As mentioned, to gain customers a company must first know and understand them at the prospect stage. This provides information on how customers behave, why they buy currently, and even how they may behave in the future. This data also helps companies identify what customers think about them, their products, and customer service. If customers think well, it would be prudent to continue enhancing all the aspects they like, and if they feel poorly about a company and its offerings, it would be best to revamp and change things to suit customers. It should be the aim of companies to create a profound and lasting impression on prospective and new customers – one never knows which these customers could become a company’s most valuable customers. In fact, the aim should be to convert all customers to becoming valuable and loyal.

The mistake a number of companies make is to gain hurriedly, several new customers, and then move on to gaining a new set. In the process, they forget to take good care of their existing customers, who are the ones with the potential to become the company’s most valuable customers. We know that business expansion is critical to success – however, it is also true that 80% profits of any company come from 20% of a company’s existing customers. It is these most valuable customers that companies must pay special attention to, and do whatever it takes to retain them for as long as possible. The valuable customers are also the ones who would provide genuine and useful feedback about the service and products of a company, which in turn would help a company become better and forge ahead of its competitors.

As a company, do you know what makes for most valuable customers? Valuable and profitable customers are those who trust a company enough to buy its products irrespective of whether they are more highly priced, and or completely new. These customers would not wait for discounts or incentives to buy, but would readily purchase products even at their full price. A company’s most valuable customers would provide repeat business and huge orders, rather than intermittent small orders. They trust a company to deliver on time, and would not continually check back on the status of their orders. Another sign of a company’s most valuable customers is that they would pay on time, every time, without reminders and follow up, and would not hassle the company for minor problems and or after sales service. A company that keeps track of such customers, would know, over time, what percentage of its customer base would be valuable and profitable, and what percentage the company would be better off without having as customers. Several companies would probably realize that some of their ‘biggest’ customers are their least valuable and profitable, and it would make business sense to part ways with such customers.

To ensure that your company’s most valuable customers stay and remain profitable, it is imperative to treat them with importance and ensure that every experience they have with the company is pleasant and memorable. When customers receive courtesy and empathy, they tend to become loyal, and would prove, over time, to be a company’s most formidable assets. Post identifying your best customers tailor the offerings of the company to meet their particular requirements and needs. Ensure that your service staff is well-trained and equipped to respond speedily and resolve their problems with efficiency. Customers who make your company successful expect and deserve preferential treatment, and a company that can consistently deliver on its promises would be able to retain its most valuable customers, while attracting other customers too.

The good news is that technology and tools are now available to companies to help identify their most valuable customers, and other information required to keep such customers. It depends on a company and its workforce, how effectively they use it to strengthen the company’s profit margins and gain a customer base with an increasing number of valuable customers.

Learn about a new approach to better customer service!

Interactive Guides for Superior Customer Service

Create interactive decision trees for customer service management, cold call scripts or self-service. Improve sales performance metrics and customer delight across your call centers.

Interactive Decision Tree