Posted on: Monday, March 25, 2002

60 SECONDS ON BUSINESS
Customize approach for customer loyalty

By Dr. Drake Beil
President, Solutions Inc.

I want you to focus on discovering what your "average customer" looks and sounds like.

More important, you need to know what they are worth to you in an average day, week, month, year and over time.

What's their average contribution to your sales and profits?

Industry averages in supermarkets show a loyal shopper may be worth more than $5,000 per year in sales.

You need to ensure you have the additional products or services that they want.

After that, you have to be able to sell them effectively.

Banks have long known that you need customized treatment for different customers. They invented "private banking" and even call regular account managers "relationship officers" to emphasize the importance of bonding with the customers.

Multiple account relationships increase loyalty and decrease switching.

Credit-card holders increase in value over time to banks, as debt increases and their setup and maintenance costs decrease.

If you switch credit cards every few months, you are far from profitable.

That's also why you see the many loyalty programs for just about everything from air miles to phone minutes to grocery bills.

Some include complimentary products and cash rebates, and companies are forever searching for the ideal incentive to ensure loyalty and increase customer retention.

Reach Dr. Drake Beil at drake@60secondsonbusiness.