In a meeting the other day, a colleague from another agency, and respected industry person, posed the following question:
“Why are we giving our best offers to our most loyal customers? They’re going to stay anyway, right? Maybe we should be giving them to our least loyal customers to increase their engagement?”
Fair call and an interesting conundrum. In a world with limited resources (in this case, a finite amount of product subsidies our shared client is able to give away each year), perhaps the question should rather have been “From which customers are my best offers likely to extract to the highest commercial return?”
Here’s the thing, in my experience, low loyalty customers are more than happy to take up good offers. The business gets a quick revenue shot in the arm and everyone is happy. For that quarter. Then the bad guys turn bad. Their revenue and at risk scores soon fight their way to the bottom again. But here’s the thing with the good guys. The loyal guys. No matter how much they’re currently worth to you, and let’s face it, your most loyal are almost always your most valuable, they could be worth more. Like a lot more. Like 30% more on average in my experience.
When we at Digital Alchemy look to extract more value from customer assets, we always look to the high value, high loyalty segments first and we always find more. They always offer more. Every. Single. Time.
Don’t for a second think you have all of your best customer’s wallet (or potential wallet). Send them your best offers. As a priority. They will respond with higher value, and deliver over the long term. And they will love you. And talk about you. Which we all know drives even more value.
The question I posed earlier isn’t really a question at all. Send your best offers to your most loyal customers. It’s the smart way to do business.