V.ery I.mportant P.ersons shape the long-term future of any successful business. Here’s how to develop a marketing strategy that gives your most important patrons the experience they (and you) deserve.
As we’ve covered before, there’s no better predictor of a multi-location, brick-and-mortar business’s long-term success than its best customers. “VIPs” spend more money, they refer more new customers, and they are the best brand advocates – hands down.
Due to VIPs’ importance, every business should have a VIP marketing strategy in place. Let’s take a look at the marketing solutions that are best suited to drive sales from VIPs and retain their business (while also being mindful that marketers want to reduce hassle as much as possible).
VIP Marketing Solutions Need To Go Beyond “Loyalty”
The concept of “loyalty” has become (forgive the loaded word, but I think it’s apt) bastardized in modern marketing discourse. Nobody knows what exactly “loyalty” means, what it does, or how to get there. We just know that it’s important and wander about from there.
For example, I like this perspective from the Harvard Business Review:
- Everyone asks “How do we make our customers more loyal?” instead of asking themselves, “What kind of loyalty do we want our customers to have, and do we want to have for our customers?”
Spot on – “loyalty” has become akin to a business saying, “We need more money!”, without acknowledging that the only way to make money is to spend money. You have to invest in the drivers of loyalty, not loyalty itself, in order to see any results.
I also like this perspective from Forbes:
- Most companies view marketing as the thing they do to win a customer and customer retention as everything that happens after the sale. But they’re wrong. Marketing is equally about keeping a customer as it is about getting them. Loyalty is a function of marketing on a day-to-day basis with new and existing customers. Focusing solely on customer acquisition is a wasteful, myopic, and arrogant business strategy.
Again: spot on. “Loyalty” isn’t something separate from getting a new customer, or something that happens after a few customer visits. Loyalty is an ongoing commitment to customer excellence.
Now, remember that VIPs are even a step above general customer loyalty. These are the MOST loyal customers. So, to foster a thriving VIP community, marketers have to create solutions that do everything loyalty is supposed to do – only better.
In other words:
- You have to invest in the drivers of VIP customer satisfaction, not just “VIPs” themselves.
- VIPs require ongoing engagement and interaction; a one-time interaction will fall flat on its face
Why VIP Marketing Solutions Are Crucial For Long-Term Business Success
Here’s another quote that I really like from that aforementioned Forbes article:
- One British bakery owner’s use of a Groupon promotion led to 8,500 new customers. That might seem like a miraculous success, but the unexpected swarm of new business overwhelmed her store, forcing her to make emergency hires and deploy poorly-trained new employees, and wiped out nearly a year’s worth of profits. When it comes to new customers, you can have too much of a good thing.
Reading between the lines – too often, brick-and-mortar business operators assume that all customers are created equal. A huge lapse in logic. Remember:
- Entrepreneur found that 61% of small business revenue comes from repeat customers and repeat customers spend 67% more than a new customer.
- We also know that a whopping 2/3rd of brick-and-mortar revenue comes from just 25% of customers and that 72% of customers only visit once.
So, on one hand, a brick-and-mortar business could lose the bottom 50% of its customers and only see a nominal drop in sales. One or the other, losing the top half, or even the top 25%, would render a business future-less. That’s the power of VIPs. Make sure they continue to have a great experience in order to solidify a business’s future existence.
5 Steps For Creating Effective VIP Marketing Solutions
Here’s another quote about VIPs that I like, this from the Harvard Business Review:
- Loyalty shouldn’t be a data-driven gimmick for capturing customers and market share. It is one of those rare virtues that can be both a means and an end for new value creation in healthy relationships between consumers and companies. But that only happens if companies commit to offering loyalty as well as asking for it.
I like it because it describes the give-to-get world we live in. To effectively market to VIPs, you have to make sure you commit to the program as a brand – promote it, talk about it, make it cool. At the same time, you also have to ask VIPs to continue to be loyal. A passive approach won’t work on either end. These should be the guiding principles of any effective VIP program.
With this in mind, the rest of the program designs itself:
- Create a unique experience for VIPs: pretty easy when you’re an airline – your best passengers get the best benefits. But at a smaller, brick-and-mortar business, you have to offer a unique experience to your top 5%-10% of customers. One way: offer them unique rewards once they achieve VIP status. Remember, customers WANT preferential treatment – 75% of consumers approve of businesses giving preferential treatment to customers who spend more money.
- Actively communicate with VIPs and solicit their feedback: Remember, VIPs are instrumental to your business’s long-term success. You have to make them an active part of the program. So communicate with them in real-time (mobile works great here) and create a two-way feedback loop.
- Use VIPs to create new customer behavior: VIPs who come in at the same time every week are, of course, terrific. But you know what’s better? Having those VIPs open up new types of customer behavior. Actively ask VIPs to try out something new (like coming in on a new day), reward them for this new behavior, and they’ll bring friends.
- Meticulously track results: Think of it this way – Forbes reported that Americans spend at least $1K annually eating out for lunch. If you’re a restaurant, you want at least 50-75% of that spending coming your way. If you don’t know exactly how much your VIPs are spending or how this amount has shifted over time, you’re not going to produce results. Run your brick-and-mortar business (or any business for that matter) Moneyball style.
- Automate when possible: as we said in the opener, you have to reduce hassle whenever possible. So, automate what you can. For example – instead of contacting VIPs when they achieve VIP status, set up an algorithm to figure out when people reach VIP status and send them an automated note welcoming them to your upper echelon.