In retail, this idea of 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, we need to break down shoppers into five main 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 do not 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. If we are serious about growing our business, we need to focus our effort on the loyal customers, and merchandise our store to leverage the impulse shoppers. The other three types of customers do represent a segment of our business, but they can also cause us to misdirect our resources if we put too much emphasis on them.
Let me further explain the five types of customers and elaborate on what we should be doing with them.
Naturally, we need to be communicating with these customers on a regular basis by telephone, mail, email, etc. These people are the ones who...