The 3 Types of Customers You Should Know

3 Types of Customers

Everybody is not your customer. It’s easy to get distracted and try to market to everyone. But the result is usually an overextended and wasted marketing budget.

A smarter marketing approach is to get to know the most common types of customers, learn what motivates each of them, and make data-based marketing decisions that resonate well with the types of customers you know like your business.

In this post, we’ll discuss the three most common types of customers, provide insight into what motivates these customers to visit and buy from your business and give tips on how you can connect with each type of customer in more meaningful ways.

1. Commodity Customer

The first type of customer cares about price above all. If you offer a discount or a better deal than any of your other competitors, you’ll likely attract this type of customer. In fact, the only way, usually, to encourage loyalty is to offer a discount.

While marketing to the Commodity Customer is great for new customer acquisition, there is little guarantee they will remain loyal to your brand once your promotion ends or if there are any future variances in the price of your product or services. As such, the Commodity Customer will erode margins.

Additionally, when you offer discounts on your products and services, you run the risk of employees giving less than desirable service. For example, if you offer a half-price meal, the server might view the customer as someone who isn’t going to offer as large of a tip as someone paying full price. The result could be lackluster customer service, which can be detrimental to your business.

We know that after one negative customer experience, 51% of customers will never do business with that company again. We also know that last year businesses lost $75 billion due to poor customer service.

With this in mind, trying to cater to Commodity Customers at the expense of a potential poor customer service experience will not only be unproductive but possibly even counterintuitive.

Additionally, first-time customers are expensive, and they are usually only worth the investment if they stick around and continue to purchase. Insight from MarketingProfs suggests that only a small percentage of people will make a repeat purchase. You spend a ton of time and money marketing to new customers, but the value lies in a customer’s second purchase. Why? Because a customer that purchases a second time is much more likely to purchase a third time. Furthermore, when you retain just 10% of your first-time customers, you will likely double your revenue.

To illustrate this point, here is a quick breakdown of what it costs to market to and acquire a new customer and how many repeat visits it may take to turn a profit.

Traditional Marketing Push: $1,000

New Customers: 50

COA: $20

Check Average: $30


Profit Per Visit:  $3

# of Visits for positive ROI: 7

Marketing to Commodity Customers where customer acquisition is the only goal is a lose-lose. The true value lies in conversion down the funnel. The only way to make marketing to this type of customer work is to have a strategy for customer retention and to provide a stellar customer experience.

2. Convenience Customer

The second type of customer is the Convenience Customer. These customers value service and quality above all else. This type of customer will pay more for great service, quality, and convenience. However, they have higher expectations when it comes to service, quality, and convenience. As such, this type of customer is much more likely to leave and seek out an alternative option in the event of a poor customer experience.

Marketing to this type of customer is not a bad idea, especially considering 8 in 10 consumers are willing to pay more for a better customer experience. But, brands that market to this type of customer must have full confidence in their ability to provide a positive customer experience on all levels. A single incident could cost you this type of customer.

If you have a solid customer experience plan, excellent service, and flawless execution, you can rest assured this type of customer will offer you repeat business and visit more frequently.

When looking at the math, focusing on providing an excellent experience and attracting customers that value a good experience is worth it in terms of margins. Loyal customers are worth up to 10X as much as their original purchase.

Rather than wasting your time offering discounts to one-time visitors, focus your energy on attracting, engaging, and retaining high-value customers.

3. Connected Customers

The third type of customer values experiences most. Since these customers value experience most, they are the most likely to build an emotional connection to your brand and remain loyal when you deliver on their expectations.

The Connected Customer will go out of their way to visit your business and they will spend more when they do. This type of customer prefers your business because you understand them, are connected to them in a meaningful way (e.g. you know their name, you understand their favorites, you make their visit personal and special).

Take Starbucks, for example. Starbucks is great at connecting with customers and providing a personal experience. When you visit a Starbucks, you order a drink using the language they created, yet the order is unique to you. The baristas call you by name when your order is ready as they do for every other guest there. Starbucks delivers an experience that is tailored to each guest on their app as well, with personalized recommendations and promotions. Interestingly enough, coffee becomes secondary to the connections formed and customized experiences.

Not only does this type of customer visit frequently, but they are often willing to refer to your business because they can count on you to offer a great experience to friends and family members. Referrals are invaluable to your business because people are 4 times more likely to buy when referred by a friend. Additionally, referrals have a larger CLV than customers that are not referred, and companies with formalized referral programs experience 86% more revenue growth.

Focusing your marketing efforts on Connected Customers will prove the highest ROI in the end.

Wrap up

While it may be easier to focus on customers that value price and convenience over experience, it’s not always the wisest choice in the long run. By identifying your best customers that visit and spend the most you can more effectively engage and retain them to deliver incremental revenue and positive ROI to your bottom line.

Note: This post was updated from a previous article written by Sara Spaventa.