It seems as though we are constantly faced with the issue of trying to find new customers. Most of us are obsessed with making sure our advertising, displays, and pricing all “scream out” to attract new business. This focus on pursuing new customers is certainly necessary but, at the same time, it can wind up hurting us. I believe our focus really should be on the 20 percent of our clients who currently are our best customers.

Focusing on the best current customers should be seen as an on-going opportunity. To better understand the rationale behind this theory and to face the challenge of building customer loyalty, let’s look at five customer types.

Loyal Customers: They represent no more than 20 percent of our customer base, but make up more than 50 percent of our sales.

Discount Customers: They shop our stores frequently, but make their decisions based on the size of our markdowns.

Impulse Customers: They don’t have buying a particular item at the top of their “To Do” list, but come into the store on a whim. They will purchase what seems good at the time.

Need-Based Customers: They have a specific intention to buy a particular type of item.

Wandering Customers: They have no specific need or desire in mind when they come into the store. Rather, they want a sense of experience and/or community.

Retailers live or die based on one thing and one thing only - customer loyalty. While location, location, location is the mantra, and great margins help a lot, it is the repeat customer and word of mouth generated by loyal customers that drives true retail success.

It seems as though we are constantly faced with the issue of trying to find new customers. Most of us are obsessed with making sure our advertising, displays, and pricing all “scream out” to attract new customers. This focus on pursuing new customers is necessary, but, at the same time, it can wind up hurting us. Perhaps our focus really should be on the 20% of our clients who currently are our best customers.
This idea of focusing on the best current customers should be seen as an on-going opportunity.