So, we’ve all heard of the 80/20 rule and its place in our personal lives but what about for brands? Studies have shown that 80% of a brand’s sales are made by its loyal customers and the other 20% is attributed to new customers. Brands have placed great focus on growing their ‘new customer’ base but have not done a good job of developing the ‘loyal customer’ base. Brands are finding it more difficult to grow loyal customers due to market saturation, competitors, and millennials lack of brand loyalty.
In order to thrive and see true success, brands must now turn to turning those new customers into loyal customers. The best way that brands can do this is by bettering the customer experience. Now, I know we talk about customer experience a lot because we are consumer-centric marketers, but a study conducted by eConsultancy and Adobe Marketing has proved that true competitive advantage will be in Customer Experience for brands. See, we’re on to something here.
Growing that ’80’ will require the 4-Ls: Locating, listening, learning, and leveraging.
- Locating your customers mean finding out where they are. This is not referring only to geolocation but also to where they are in the buying cycle when looking for options. It also refers to their location in the marketplace, where can you market to them. Brands have to reach out to these areas in the market place and understand where in the buying cycle they have an opportunity to interact with consumers.
- Listening to consumers after locating them. Brands must listen to their consumers to find out what they want. Brands have to take this opportunity to research their consumer base and find out what they are talking about, what their needs/wants are, what are their pain points. This is not just in terms of product/service needs but also with the interaction with brands themselves. Consumers often voice their opinion on the experiences received from other brands when purchasing/using a product or service. So, listening in will help brands better themselves and understand what not to do when interacting with their consumers. Also, listening give brands an opportunity to learn the type of relationships the consumers of their product/service group is looking for. Some require a marriage-type relationship with lots of communication, where others want ‘one-night stands’ with less communication.
- Learn more about the consumers. In order to turn a one-time sell into a lifetime buyer, brands must learn more about their consumer base. This will require our first two ‘L’s as well as data collection. Brands will have to collect data on their consumers and learn their buyer persona. By understanding and learning the consumer, brands can better market to those consumers and give each consumer a more personalized experience.
- Leveraging the customer experience. After a brand has mastered the first 3 ‘L’s, it should now leverage the customer experience that it provides as its competitive advantage. Not only should brands use this as a marketing tool, but via their new loyal customers, brands should have created brand ambassadors. These brand ambassadors can help amplify the brand’s presence in the marketplace and further grow their ‘loyal customer’ base.
Use the 4 Ls to grow your loyal customer base and increase the monetary figure inside of that 80% of sales. Commit to creating loyal customers by using an aggressive strategy that utilizes the 4Ls and growth shall follow.
Empowered Strategy Team
Empowered Strategy is a strategic branding and marketing consulting firm based in St. Louis, MO. We specialize in creating consumer-centric branding and marketing strategies as well as campaigns that are aimed at revenue growth. At our core we believe in and work with the following motto: “Brilliant Branding. Marketing Excellence.”