Continuing our article series on the way that people describe the types of customer loyalty, we’ll take a look at this article from About.com that focuses on the types of customers in the retail industry. Rather than focus on specific aspects of loyalty, they discuss the customer as a “type,” and what type of loyalty that customer represents. The terms they use are:
- The Loyal Customer
This is the customer that continues to come to the store, presumably (although this is the trap that too many businesses fall into) because they are committed to the company. Rarely is that true, as we discussed in the previous article, but that is the assumption that most businesses go with. Interestingly, the article says that the loyal customer makes up 50% of all sales, but some research has found that loyal customers may not bring in much extra sales at all. Someone that walks into a Best Buy and orders 3 big screen TVs once, only to never return, is still bringing in more revenue than a customer that comes in weekly but only buys one clearance CD. Loyalty is important, but it doesn’t always mean that the loyal customer is more valuable than another type of customer.
- Discount Customers
Discount customers are another type of loyal customer, but they are simply looking for products that are on sale. Interestingly this is still a type of loyalty – the customer is acknowledging that they like your products – they are simply not willing to spend that much on them. Discount customers can be extremely valuable, but they also may not be. It depends entirely on your profit margins during markdowns, among other things.
- Impulse Customers
The article doesn’t give much credit to impulse customers, but impulse customers are often loyal customers. They simply don’t shop with a plan, and instead go in because they know the company. Depending on your marketing techniques and the desirability of your products, this can be extremely valuable.
- Need Based Customers
Once again, another type of loyal customer. These customers don’t come in regularly, but if they need something specific, they will go to your store first.
- Wandering Customers
These are customers that have no motives. They simply come into your store. They may not bring a great deal of money, but they can be turned into more desirable customers over time with the right marketing tactics.
Each one of these types of customers is valuable, and they all have their own degrees of loyalty. You may decide to group your customers or employees into “types” rather than a specific loyalty term, but in the end you’re still measuring the loyalty the customer shares with your company.
We’ll share some concluding thoughts in the next article.