Customers are one of the most critical parts of any business. No matter which industry your business is in, from ecommerce, finance to architecture or law, everyones’ success depends on attracting customers. But, while every business owner wants to attract as many customers as possible, the truth is that some clients bring more value to the business than others. Pareto rule claims that 20 percent of your clients contribute to 80 percent of the revenue of your business. This also means the easiest way to increase revenue is to focus on the 20% of the clients that bring in the most of the revenue. These clients are considered high-value clients, and every company should learn how to identify them and use them for their benefit.
You might be wondering when to identify high-value customers to ensure the best results, and the answer is simple: Anytime. You can find high-value customers among your current clients, or you can implement data enrichment and identify them before they even become your customers. The truth is that your clients are what can make or break your company. By identifying high-value customers, you can ensure they have a great experience dealing with your business and continue bringing in sales.
Who are high-value customers?
Understanding who your customers are can help your business create more efficient marketing campaigns, identify new opportunities, and increase revenue. While you want to target as many people as possible to ensure you get at least some sales out of it, the truth is that you would get better results by targeting the right type of customers, high-value ones.
High-value customers bring bigger chances of sales and profit to the company, and in the end, they will impact the company more than a traditional user. Not only are they loyal customers bringing repeat business to the company, but most often, they will recommend the brand they trust to other people bringing additional business to the company.
Most often, high-value customers:
- Are loyal to the brand that meets their needs
- Will try the new products from the brand they trust
- Choose to stay with a brand even if there are cheaper alternatives
- Will recommend the product they are satisfied with to their network
- Leave reviews on social networks
- Generate repeat business
- Create long-term relationships with the companies they trust
The description of high-value customers will differ from business sector to business sector, as they all have different relationships with their clients. But, most commonly, high-value customers will not only create the most profit in the business but will also expand the business’s customer base by sharing their experience with other like-minded customers.
Why do you need to identify your high-value customers?
If you want to ensure you retain your high-value customers, the first step you need to take is to identify them. This will allow you to know who your targeted customers are and allow you to make informed decisions about any future endeavors.
By knowing who your high-value customers are, you can:
- Make informed decisions and plan ahead
- Generate more revenue by upselling and cross-selling your products and services
- Tailor your products and services according to the customers’ preferences
- Maximize the value of the clients
- Develop long-lasting relationships and repeat business
- Get a clearer picture of your customers allowing you to create better marketing strategies
- Get more business for your company due to high-value customers sharing their positive feedback
Not only does this make a difference in your sales department, but knowing your high-value customers also have an impact on different departments such as marketing and operations.
How can you find who your high-value customers are?
Artificial intelligence and machine learning are making quite an impact in different business sectors, and it is no different when it comes to identifying high-value customers. There are various strategies you can use to determine who your high-value customers are, from implementing KPIs or conducting a user survey to implementing a data enrichment. These are the most common ones:
Deploy key performance indicators (KPIs)
Key performance indicators, or KPI for short, objectively measure the value a customer brings to your company. This is done by analyzing different metrics such as lifetime value, average order value, and many others. These metrics can help you determine different elements of your customer’s journey. For example, by implementing Lifetime Value KPI, you can estimate how much profit a customer will most likely generate for your business.
Build relationships with clients
You can transform potential clients into high-value customers by building relationships with them. Your customers want to feel valued instead of like just another transaction, and by cultivating a relationship with them, you can ensure they become high-value customers.
Use your loyalty programs
Everyone who has signed up for your loyalty programs is interested in your brand and intends to become a repeat customer of your business. According to Bussines.com, not only is it cheaper to retain customers than attract new ones, but they also spend 67% more on average than new customers. By monitoring your loyalty program, you would be able to determine who your biggest spenders or high-value customers are.
Use customer feedback and user surveys
What better way to learn more about your customer than by using their own words. By using their feedback, you can identify any issues they have and fix them in order to generate more high-value customers.
Use social media
Most high-value customers will mention the brands they trust online, driving new traffic to that brand. By monitoring your social media mentions, you can see who your high-value customers are and reward them accordingly.
Implement data enrichment
Data enrichment allows you to identify high-value customers before they even do business with you. By using IP analysis, device fingerprinting, email, and social media lookup tools, you can gather more information about potential clients and determine if they have the potential to become high-value customers.
Every business owner wants their business to become successful, reach the right customers, and continue growing. In order to succeed, you have to meet various criteria, from having an excellent product or service, implementing a marketing strategy, and finding clients interested in it. Although all of these elements require a lot of effort, finding clients is still the most difficult one. By following the advice listed above, you can identify your high-value customers and help your business increase profits.