In our last blog, we explored the value of the loyal customer and the proof you need to invest more heavily in a loyalty program.
In part two, we dive deeper into how we nurture our loyal customers and create a plan for greater profitability.

Firstly, let’s take some time to analyse your customer base.

  1. Classify your customers into the following specific segments so that specific actions can occur.
  1. Crafting a nurturing plan – where are the opportunities?

A loyalty program is an essential business ingredient that holds significant opportunities for every business. As with all great opportunities, specific actions must be undertaken to create outcomes.

Maximise the return on the effort you have made in establishing your loyal customer base with a simple segmentation process.

Segmentation is the starting point for strategies designed to deepen your relationships and knowledge of those customers who invest in your offering.

Establishing your critical areas for awareness will provide you with essential evaluation questions to ask regarding these customers.

This segmentation has a simple three colour classification – Blue, Amber and Red.

When it comes to customer loyalty, several factors impact the quality of the relationship.


Fig 2 represents how business’s transact and the regularity of interactions, which drives measurable outcomes to boost the understandings of customer loyalty.

For your KEY CUSTOMERS consider;

  • What specific action have I undertaken to let these customers know they are highly valued?
  • Have I met and or have transactions occurred within the past three months? If not, why?
  • Have I spent specific time in reviewing the needs or issues these customers face?
  • What opportunities or risks do these customers foresee?

Never become complacent about your relationship with key customers. The reality is – every current and new competitor will be working towards acquiring your customer.  

Special events, customised solutions or one-on-one conversations designed to service and possibly uncover hidden needs are crucial to sustaining a highly satisfied customer.

The closer your relationship, the deeper your knowledge is of your customer, the more in touch you are with the core of your business, allowing you to be at the forefront of subtle trend changes.

This type of market and customer intelligence keeps the best businesses ahead of their competition and deeply entrenched with their loyal customers.

HIGH POTENTIAL CUSTOMERS provide the ideal base to create business and revenue growth.

In reality, most of the hard work in terms of relationship building has been done. These customers support your services; know and trust your products and/or services. The opportunity exists now to broaden the range of products used, or the volume of business they share with you.

 The focus within this segment is to identify what customer needs you can get better service and what challenges your customers are facing.

While this sounds like a logical and simple solution, it is incredible how much time is lost servicing the customers who are in the review and red zones shown on the segmentation matrix.

When first undertaking a strategy to boost your business, the starting point is simple. Focus on customers with the highest probability of delivering the most significant success. In other words, look for the low hanging fruit!

ID SOLUTION CUSTOMERS previously had or still have high business volume, but the regularity of transactions and or quality of interactions have declined.

As with HIGH POTENTIAL customers, a significant investment to originally onboard the customer has been undertaken and often these relationships can be reinvigorated with a simple conversation.

The opportunity with this segment is to merely reach out to the customer and engage in discussions specifically designed to reconnect and understand their needs. The objective is to identify the specific reasons for the changes in previous business transaction patterns.

UNDERSTAND, REVIEW, PARK CUSTOMERS

Undertaking specific actions that create a focused set of undertakings is the most critical aspect of business life. Prioritising activities within particular parts of the customer loyalty segmentation, is an absolute must. Focused efforts to provide the best outcome for energy invested is the only way forward.

UNDERSTAND AND REVIEW CUSTOMERS require a limited, yet focused amount of time to extract learning opportunities. These learnings should be used to improve your offerings and deepen your understandings around customer concerns that can be resolved.

PARK CUSTOMERS is an area that must be watched and time invested only when it is readily available.

UNDERSTAND, REVIEW, PARK segments can be a significant drain on your business and resources.

These segments attract focus for a multitude of reasons. A lack of understanding and or poor customer knowledge means these customers may be seen as having more potential than would ever be possible.

On other occasions, some of these customers create significant drain due to unreasonable expectations. Some may only use a provider as a price checking mechanism, designed to keep their prefered provider on their toes.

No more than 10% of your time should be invested in the UNDERSTAND, REVIEW, PARK segments. Save the remaining 90% for the customers with the potential to provide profitability and sustainability.

Businesses often invest time and resources in the wrong customers. It is essential to focus on those with the most significant opportunity. These customers drive growth and ensure a sustainable and successful business.

Be fact-based and honest with your customer segmentation to truly identify opportunities for your business.

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