By Steve Rosier, Director of analytics, EMEA at Verint
While many businesses have strong objectives to increase customer numbers and sales, what some fail to realise is that their existing ones can hold the keys to higher revenues. Research shows that attracting a new customer can cost five times as much as keeping an existing one (Lee Resources). At the same time, success rates of cross-selling to an existing customer are 60 – 70%, which is far higher than a new prospect, according to Marketing Metrics. What’s more, we recently found in our own research that customers are generally happy to pay extra for services if they receive a good experience – as many as 43 per cent agree. Some industries are already attuned to the lucrative revenue opportunities from existing customers and have adjusted their marketing accordingly. One of the places this is most apparent is in the casino.
For casinos, understanding their customers and providing an exclusive experience to those that are willing to part with more cash is a key focus. Offering this ‘royal treatment’ can include anything from staying in their best hotel suites; to private jet transfers and 24 hour limousine use. Whatever it is, giving their most valued customers a unique and tailored experience seems to really pay off. Providing these services makes customers feel special and that they are getting an experience that they wouldn’t get elsewhere. Ultimately, this strategy encourages customers to keep returning, and in the best case scenario, talk to friends and peers about their positive experiences.
These personal recommendations can be very powerful in today’s economy. According to a recent McKinsey report, word of mouth is the primary factor behind 20 to 50 per cent of all purchasing decisions. With this in mind, businesses need to adopt a scientific approach to their marketing and customer service strategies by analysing and identifying their ‘high rollers’ or ‘key players’ and understanding how best to engage with them.
Look for the big spenders
Use your sales information to find out which of your customers are spending the most with your company. Organisations should also identify overall trends in spending patterns. For example, is there a particular time that the customer uses your service or buys your product, what type of product or service are they buying and where are they buying it – in store or online? These factors combined will help you determine what kind of incentives you should offer these customers. So, if they regularly use your online retail site, you could provide next day delivery, discount on future orders or free items. You don’t necessarily have to match the extravagant benefits of the casino world, but you can follow in their footsteps to make sure your top customers are receiving a cut above the rest.
Target those who will shout about your brand
It’s not all about how much the customers are spending. Once you’ve identified your top customers, you then need to determine their potential to become advocates of your brand. This can be done by using technology to collate and analyse ‘Voice of your Customers’ to uncover their likes and dislikes, how they interact with your brand and whether they talk about experiences with others. In today’s multi-channel world, customers can interact with an organisation through a variety of ways, from calls to the contact centre, to emails, texts, social media, and in-store. To get a complete view of the customer experience businesses will have to monitor and analyse all of these channels.
Once you have a good understanding of customer behaviour, you can identify which of the high spenders are also interacting and engaging the most. Those that are more vocal and likely to share experiences should be placed in the premium category. For example, if you target someone that is very active on social media (via Twitter, Facebook and personal blogs) this can really help spread the word about your brand. But, in order for them to speak out in the first place you will have to go the extra mile to really provide them with a unique and memorable experience. You certainly wouldn’t want them talking about a negative experience, so you must do everything in your power to prevent this!
Offer tailored services
Once your premium customers are identified, the next step is creating a plan to turn them into brand advocates. During the analysis stage, you can group customers into categories, for example, platinum, gold, silver and bronze and offer different levels of benefits and incentives for each. However, it is the platinum customers that will be your high rollers, and they are the ones who you really need to pull out all the stops for. By analysing their preferences, you should be communicating with them via the channels they use and offering products and services that will align with their likes and interests. For example, airline companies often provide their most frequent flyers with access to the VIP lounge, seat upgrades and free drinks. If you know their favourite tipple, you can even have one ready for them upon arrival. It is all in the detail – if your high rollers receive an exceptional experience they are likely to spread the word.
Reap the rewards
Surprising and delighting your most valued customers will certainly boost customer loyalty. In addition, encouraging them to act as brand ambassadors and share their experiences is likely to lead to an increase in new customers, who are keen to receive the same kind of treatment. Using voice of the customer technology will help you build a positive brand image and increase overall sales and revenue for the business. In today’s economic environment, it’s all about making the most of your current assets and resources and your existing customers are certainly a goldmine worth exploring.