Identifying top customer performers is an essential ability for businesses looking to spend their time and marketing budgets cost-efficiently. It is not uncommon for the top 20 percent of a retailer’s customers to account for 67 percent of their sales. But there are important techniques that financial service and retail marketers can use to evaluate the overall importance of customers to guide their customer relationships investment. Here are a few:
1. Laying the groundwork:
- Establish a time period for tracking purchases.
- Assign points based on transactional details.
- Develop a weighting scheme.
2. A Detailed Example
- Provides an exact snapshot of a customer’s overall value represented as a Customer
- Repeating the process for all customers to allow ranking from the highest to the lowest scores.
3. Spotting the Trends
- Tracking the customer performance score of two hypothetical customers over the most recent 10 weeks.
- Comparing them to determine performance, then with respect to the average customer performance score for all customers.
4. Questions & Answers
- Score customers only on the basis of recency and total spend?
- Other factors to consider?
- Determining what factors fit
- Gain consensus within an organization when deciding what data attributes to include in the scoring algorithm
Six out of every 10 companies treat their best customers differently from their regular customers, for good reason. From designing messages to modify future customer behavior to tracking customer progress along a value continuum, all businesses can follow these best practices to make smart ROI decisions based on their customers’ performance.
Find out how to score customers by their value to your business. Read the full story in CCG’s white paper “Have You Scored Your Customers Today?”