This is the first in a series of posts where we seek to share some of the business and marketing insights we have gained over the last 15 years. By doing so, we hope to offer some guidance to you during these challenging and ever-changing economic times.
Customers are the lifeblood of every business. This is why it is so important to understand the types of customers you are dealing with to allocate resources efficiently to generate the highest profit. By having a better understanding of the types of customers, businesses can segment them and create better marketing strategies that lead to growth.
1 – Loyal Customers
Loyal customers are those customers that keep on coming to your business to purchase what they need. They are receptive of recommendations, as they trust your business, which makes it easy to upsell to them.
They also refer others to your business and are a strong advocate.
2 – Impulse Customers
Impulse customers buy on impulse rather than having a list in mind on products to buy. They are the best to upsell to and are very open to recommendations and suggestions since their purchasing is unplanned.
Impulse customers bring in second sales revenue for business – only second to loyal customers.
3 – Need-Based Customers
Need-based customers are drawn to specific products and services. They know your product or services as well as your customers. Need-based customers are hard to upsell since they are buying for a specific need.
4 – Discount Customers
Discount customers are customers that buy when prices are marked down or when they receive a discount. They hardly buy products at their full price and will shop around until they find the “best deal”.
Businesses need to identify this type of customer as quickly as possible as they move on quickly to the next deal when the markdown is over. They are the least loyal type of customer and very resilient to upselling.
5 – Inform Me
Inform me the type of customer is aware of their problem and solutions but is not sure about how to solve it. They are searching for advice or products on how to solve their problems.
6 – The Window Shopper
Window shopping customers draw the largest traffic to most businesses – whether brick-mortar or eCommerce website. They are attracted to great looking products displayed on shelves but have no desire to buy it.
It is important to note that window shoppers bring in the smallest percentage of sales revenue.
In conclusion, for your business to be more profitable, you will have to understand each customer, their behavior, and most importantly how they buy. By having this information you will be able to come up with strategies that convert each type of customer into a loyal customer.