Loyal customers VS Best Customers

Where is your greatest opportunity for growth? Where do you start when the goal is increased sales?

Many would say that you start with your most loyal customers, those who know you well and prefer your product or service over that of your competitors.

A bit of research came across my desk this morning to remind me of the counter-intuitive truth that your most loyal customers are probably not your best customers.

The latest is from Experian Simmons, courtesy of EPM’s Datafile:

Those who see new movies within the first two weeks of their theatrical release are the most likely to buy and rent the films on DVD.

These folks watch so many films that their appatite can’t be satifified in any single channel. Chances are very likely they frequent more than one theater chain, and shop for DVDs at more than one store. High-volume consumers, not very loyal.

Two previous studies come to mind:

1) Garth Hallberg’s All Consumers are Not Created Equal included the summary of a study showing that high-volume consumers of OTC pain meds bought across many brands and from many stores. Best customers, very little loyalty.

2) A project I worked on in the late 90s with Publishers Weekly showed that one bookstore chain’s highest-volume customers only bought about 30% of their product from the chain’s stores. Although they were the chain’s BEST customers, they bought 70% of their books elsewhere.

When conducting a Strategy Audit, one of the important factors I consider is customer loyalty and how it relates to growth strategies. Your greatest potential for growth is not among the most loyal, because they are already buying everything they want from you. The best hope for increased sales is from that group who see you as one of many vendors from which to choose.