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A high-value customer can be the difference between a successful company and a bust. They represent a big chunk of your business, and them leaving can oftentimes be fatal. It’s essential for any business to identify their high-value customers and make sure retain them.
What is a High-Value Customer?
A high-value customer is a client on whom the survival and profitability of a business depend on. The customer can, for example, be a big chunk of your business. Or, they might be an influencer, disappointing whom might end up with you losing more clients than just that specific customer.
So as such, it’s important to know how to turn a low-value customer into high-value, or how to retain the high-value ones you already have.
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Anyway ... sorry for the interruption! Let's resume the rest of the article.
Measuring High-Value Customers
Every business has some kind of audience that is their customer base. What you need to recognize is that not all of your customers think or feel the same. They shop different, make decisions differently, and have different needs and wants.
This is why audience segmentation is so important. You can segment your audience any way you like so that it makes sense for your marketing purposes, but you should always have your high-value customers in laser-sharp focus.
- Client Referrals
- Client “Advocacy”
Rank your customers from highest to lowest value across a 12-month period. You’ll be able to see which customers provide the largest portion or contribution to your bottom line. Those who contribute 80% of your total value are your high-value customers.
Note: don’t forget that low-value customers are important too. Your average high-value customer starts off as a low-value, becoming high-value once they realize the importance of your business or skills.
Retaining High-Value Customers
A high-value customer doesn’t always stick around. If you don’t take care of them, they might just slip through the cracks, either having their business lost completely, or turning into a low-value customer.
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Anyway ... we'll continue from where we left off above.
It’s common knowledge that customer acquisition is hard (and expensive). According to ClientHeartbeat, studies from the U.S. Chamber of Commerce have found that acquiring new customers can cost as much as 5 to 7 times more than simply retaining existing customers. It’s also known that the profitability of each customer tends to increase the longer their stick around.
So, the best way to grow your business is to maintain your high-value customers. There are several ways as to how:
Set Customer Expectations
When you set expectations early, and a bit lower than you actually provide, you tend to remove any uncertainty from the mind of the customer about the level of service you provide. It’s better to underpromise and overdeliver than the other way around. Whatever the outcome, this ensures that the customer will be satisfied with your service.
Build Strong Relationships – And Follow-up
Your relationship with your client doesn’t end as soon as the project does. Cultivate your relationship with your client during the working period together and after. Send them a follow-up every a month or two in, check if everything was up to their expectations and if they’re satisfied with your product or service.
The more “value” the client see in you, the more valuable they’re going to be in the long-term. That one post-project check-up or a small free service might be the differentiator on whether they’re going to recommend you to their network or not.
Anticipate Their Needs
Take a proactive approach toward customer service and the customer experience. Instead of waiting for problems to arise, implement an anticipatory service that eliminates problems before they arise. This usually involves looking closely at your operations and coming up with a contingency scenario for each thing that might go wrong.
Dealing with every single one of your client’s problem can be very time-consuming for both parties. The customer has to get in touch, explain the problem, possibly set up a meeting, etc. So instead, you can try automating any problems you encounter frequently.
Let’s say, for example, you’re doing social media consulting, and your job usually stays more or less the same with every other client. This means that you can, more or less, graph out the whole workflow using software. This allows you to see how, exactly, you’re doing with one account. If a problem you end up encountering a problem you’ve already solved, you can just start the solution process in the software without wasting any time.
Seeing that you’re responsive & fast towards your client’s needs means a lot to them, and might eventually end up turning them into a high-value customer.
Today, up-to-date social media pages are a must for every business. One of the benefits it has is the ability to re-engage old customers in ways that aren’t really related to your business.
Let’s say you work with a client, they’re satisfied, and then you part ways. Social media gives you a chance to give them a light nudge every once in a while with an article or a post, reminding them that you still exist. This makes sure you’re in their mind, in case there’s a friend or co-worker looking for your services.
Poll Your Customers for Feedback
Feedback is always useful for a business. It gives you an outsider’s view on how you’re doing, what your strengths are, weaknesses, etc.
And what’s a better way to get feedback than through a survey? Poll both types of customers, high and low value, and figure out what makes the two groups different. The high-value customer can show your strengths, and what your unique selling point is. The low-value, on the other hand, provides insights into your weaknesses and shows you how you could improve.