Targeting Your Best Customers

imageIn order to control the future you must control the past.  While you cannot rewrite the past in order to take over the future you can use it to predict it.  The past allows you to learn more about your subscribers so that you can then target your email marketing approach toward them.  When it comes to understanding your customers there is no better predictor of future behavior than the past.   Purchasing behavior is a response to an object of interest.  If behavior is recent then its more likely to happen again.  Perhaps that object of interest is a song you recently heard when you were around an acquaintance.  You really like the song when it’s played but you do not know who its from.  You spend the entire next day trying to remember who the song was from.  You would purchase if you only knew.  You completely forget about the experience the next day.   As an object loses its recency interest fades over time.

However,  if a positive impression is initially formed it can lead to purchasing behavior later.   This is why its important to work on forming good impressions with everyone you meet.  You had a positive impression of your acquaintance because they had something to offer you in the form of good music.  This did not translate in a purchasing decision the first time around but let’s see what happens when you run into the same acquaintance again.  By the time you run into them you are no longer interested in finding out who played the song you liked.  You do however trust their opinion so you can say they have established credibility.  When you are around them this time you hear a different song that you are impressed with.   This time you get your acquaintance’s number in case you forget the name of the song when you go out to purchase it tomorrow.   You become friends with your acquaintance and the more time you spend with them the more likely you are to go out and purchase music.  Interest peaks when exposure is recent.  Your subscribers are more likely to purchase from you in the period immediately following a mailing.   The longer they do not respond to a mailing the less likely they are going to.  You have a window of interest but after that they will forget about you completely.  One way of measuring purchasing behavior is by measuring when the purchase was made.  Before you met this person you were not exposed to music so recency was low.   Now that you are friends recency has increased.

The frequency with which an action occurs in the past can be used to measure interest.  You are now purchasing more and more music with greater frequency as a result of your friend.  The frequency of your product purchases is directly proportional to the amount of time you spend with your friend.  One other way of thinking about frequency is how it relates to exposure.  Have you ever played a song that you really liked over and over again until you got sick of it?  If you’re frequently exposed to a song then it sticks in your head and this is a good thing or a bad thing depending on what you think of the song.   The fact that you’re voluntarily playing the song over and over again means you are interested in it.

Notice what is happening here.  When your friend was merely an acquaintance they did not force their music taste on you.  They gave you a good experience by exposing you to what they considered good music.  They established trust with you.  When you later ran into them they were able to repeat the positive experience.  Credibility began forming and this led to a purchase decision. As your relationship progressed your acquaintance became a friend.  You begin basing your purchasing decisions on their judgment.   You do this because they demonstrated reliability.  Which led to an increase in frequency of purchases.

A good newsletter does the same thing.   It exposes subscribers to something that’s worth having.  The newsletters you send should be of interest to your subscribers.   If you are able to demonstrate how your newsletter is of interest you will establish trust.  From there you establish credibility by repeating the positive experience without being too aggressive.   Your subscriber is an acquaintance that is just getting to know you.  When you are able to demonstrate reliability to your subscriber they will begin relying on your judgment when forming the basis of their decisions.

Now an emerging need for treating different customers differently is apparent.  You’re not treating some customers better than others.  You are treating them like people and using their past behavior to govern your future behavior toward them.  Which of your customers recently purchased from you?   How many times did they do it.  How much did they spend on individual purchases?   You are asking yourself questions in order to learn which of your subscribers are your best customers so that you can target your marketing approach to them.   In the process you are attempting to turn acquaintances into friends by showing respect for the relationship.  A healthy relationship grows because it is mutually beneficial to both parties.

Now let’s consider monetary value and what it means to be a best customer.  Some of my favorite albums of all time have been concept albums such as Wilco’s A Ghost Is Born, The Decemberists’ The Crane Wife, Radiohead’s OK Computer, and Pink Floyd’s The Dark Side of the Moon.  The beauty of a concept album is that you are not listening to it just for one song.  You have to purchase the entire album to appreciate the concept!  Every song is made fuller and richer by the songs that surround them.  They also have a powerful emotional component. Perhaps you’ve heard a song that you really like that led you to purchase an entire album.  Once you purchased the album that led you to purchase other albums from the band until you owned their entire music catalog. You then tried to turn your friends into fans of the music so that you wouldn’t have to enjoy it alone.  If you have then you would be that band’s best customer.  You would be one of the true fans that the band relies on to make a living.  Once you have a best customer you can market to them differently because they have demonstrated through their purchasing behavior that the relationship demands it.

You would market to a best customer for a band such as Pink Floyd differently than you would for a weaker customer.  A best customer may be interested in owning all of their albums in CD quality,  having all the original vinyl copies as well as digitally remastered CDs, box sets, concert recordings, T-shirts and posters, DVD footage of live concerts as well as documentaries, Nick Mason’s Personal History of Pink Floyd, and solo albums from the band members. Marketing all of these products would be of great interest to a devoted fan of Pink Floyd but would be of lesser interest to a fan who simply wants to have MP3 albums of their most seminal work.  Here you could use a newsletter to turn a casual fan into a best customer by giving them insider information on the band in order to strengthen the relationship that fan feels toward the band.  Meanwhile,  you could keep the devoted happy by offering them exclusive opportunities for material that would only be of interest to the band’s most ardent supporters.  One purpose for the newsletter would be to track live performances from surviving band members.   A best customer would not let money be an obstacle for going to see a live performances from David Gilmour or Roger Waters.  You could offer these subscribers the first chance to purchase the best seats available.  At the same time you could keep all your subscribers happy by offering all of them an opportunity to win free tickets.  The best part of having a best customer is the word of mouth advertising they provide.  A Floyd head will try to turn their friends into fans as well.   Perhaps some of these friends may later turn into best customers.

The marketing approach of your newsletter should address the needs of all your subscribers separately.   You are going to earn most of your revenue from your best customers.  So your challenge is to turn good customers into best customers and weak customers into good customers.

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