Some of the world's greatest companies are well known for their focus on customers, think Amazon, Netflix, Tesco, Kroger, Apple, Starbucks, Costco. They all set up the right data infrastructure, organisational components and embarked on specific marketing and operational strategies and tactics to help them delight customers and defeat the competition. This requires putting customers above products and services, listening to customers in every way you can to create happier and more loyal customers. Promoting a customer led organisational change program which rewards employees on key customer metrics will deliver superior growth gains for shareholders. 

Measuring customer lifetime value is essential to a successful customer-centric strategy. Customer centricity aligns the development & delivery of products and services with the current and future needs of customers. Given 60-80% of sales come from a small group of customers it is critical to predict the length of a customer relationship, the number and value of transactions and any non financial activities a customer may engage in. Growing your best customer base is the best way to revitalise profits and your place in the market. Build programs to retain future high value customers and use these insights to find your future best customers through applying this to your growth and acquisition strategies. Advanced analytics can predict which new customers will become best and stay with you for the long term.

Emails. We receive more than we care for. But if the subject is relevant and the message is engaging and from a brand we like and trust, we explore further. How many emails do we delete based on looking at the subject line alone. That is why language and a deep understanding of what elements your customer respond to is critical. By using deep learning algorithms to mine your historic subject lines, AI can now write the subject lines for you in your brand voice beating human derived versions 98% of the time. Amazing. Deploy this across email strategies, App messaging and social Ads to generate +20% uplift in open rates and ultimately sales. 

60-80% of your sales may come from a relatively small group of customers, depending upon your industry. Given this significance, an increase or decrease in their numbers has a direct effect on sales and profits. This is a simple clear indicator of marketing and operational performance. Especially so as best customer defection rates are the lowest, so any increase in this indicates dissatisfaction from this group. Replacing 1 best customer means you may need 10-50 lower value customers, which takes considerable time and money to achieve. Good marketing and operational practises can retain, grow and increase the number of best customers you have.

Focus on Frequency. You may be surprised to know that when customers increase their shopping visits, their average spend per visit also increases. A win-win for a high frequency retailer. Even though this is counter intuitive, research suggest this phenomenon occurs because the more frequently one shops the more one learns about range and quality of what you sell, where items are located, thereby increasing spend per visit and visit frequency. Looking at frequency of visit and spend per visit, research also indicates that the largest increase in sales gains of customers spend correlates to an increase in frequency, with a smaller proportion to the increase in average basket size. Frequency therefore can have over triple the direct relationship impact on sales gain than spend per visits. The advice is therefore to ensure your promotional programs have a frequency focus and provide reasons for your customers to return.

The most important indicator of marketing success is the number of returning customers. If this number is strong and growing, key marketing components (range, quality, price, service, experience) are resonating with customers, directly and indirectly helping them choose to return. It is a customer vote of confidence which one needs to listen to. Economically, the more a customer returns, the less one has to spend on luring them back. The more they return the more they spend, the less likely they are to defect. Segmenting customers and measuring retention rates is easy to achieve, developing the right programs and providing a reason to return takes more time and effort but can be achieved through customer intelligence and lifecycle marketing programs.

We have all experienced this strange phenomenon - organisations often provide better offers to new customers than those that have been loyal for decades. What these companies are doing is rewarding customers to be promotional promiscuous and telegraphing this to their best customers by saying it is OK to move for better offers. This is a downward spiral death trap for businesses and one to avoid. This behaviour acquires customers that respond to discounts, eroding margins and lifetime value. It increases churn rates as these customers will leave when your competitor launches their new promotion. Valuable loyal customers feel dissatisfied with not being valued and start spending less. Given they account for 60-80% of sales, replacing one of them requires acquiring 10-50 new customers, meaning more budget is loaded into promotions. Further down we go. If you want customers to be loyal to you, reward the right customers that behave in the way that grows your business. The telecommunications sector is particularly bad at this. 

Marketing & sales plans often focus on getting low value customers to spend more. Most business have lots of these types of customers and are blinded by the truth that there is a reason they are low value. They prefer other brands. Trying to win their affection is difficult and expensive as we are asking them to radically change their behaviour. A more profitable approach is to build sales with your best customers. They already show you their loyalty by spending a larger share of their spend with you. Moving their spend by a small amount may give you the same spend increase as moving low spenders, and can be done less expensively. Personalised relevant offers combined with predictive targeting can help find the big fish in both low value and best customers.