The Most Valuable Types of Loyal Customers

by Sean Ogino |

The Most Valuable Types of Loyal Customers

The success of any business largely depends on how long customers, whether existing or newly acquired ones, stay with it. Customers often become more profitable over time and loyal customers account for an unusually high proportion of the sales and profit growth of successful businesses. 

To drive the point home…

Not all loyal customers are the same, though. Their further segmentation is possible. Customers may be classified into five categories based on their loyalty to your brand. In fact, this segmentation is necessary. You may be able to devise a separate loyalty strategy for each of the categories.

types of loyal customersA) Hardcore Loyal Customers

These are the ideal types of customers that every business wants to have. They genuinely love everything about your brand…then be it a brand persona, product or customer service. They take pride in associating themselves with your brand.

Due to their high regard for your brand, they are the readymade material for becoming your brand advocates. They will promote your brand with heart! If you’re lucky enough to have hardcore loyal customers, you should consider devising a program to both thank them for their support and encourage them to share the word about your business.

B) Borderline Loyal Customers

These are also known as pseudo-loyal, as their loyalty is not unconditional. They are buying from you either because they don’t have any other option or pricing of your product is within their range. But overall they are quite satisfied with your brand.

As their buying relationship with you hinges upon the availability and price, as soon as some better deal is in the picture, they will leave you quickly. These types of customers are seen more in a monopolistic type of service markets. The important thing to note here is they possess the trait to become your loyal customers. By devising a special loyalty program for them which can give them a fairer and cheaper deal, you can surely hold them for long.

After all, loyalty program members spend 5-20% more than non-members on average.

C) Split Loyal Customers

These are the people who are loyal to many brands. They will buy from the brand which is giving them the best deal at the moment. Of course, they don’t generate more revenue for you as they are less frequent, but they are not without any value either.

One of the keys to nurturing these split loyal customers is to rope them into a loyalty program. While they won’t be as responsive to it as your hardcore loyal customers or your borderline ones, some will be swayed by discounts. The customer data you gain will also be important for this segment,

D) Need-Based Loyal Customers

People in this category are driven by a specific need. If you are offering some product which is closest to what they want, they will buy from you. Otherwise, they overlook you. That want might have arrived due to various reasons such as a specific occasion, a specific need, or an absolute price point. Of course, it’s very difficult to retain such customers as they are completely driven by need and convenience, but they can win over by a personal and careful handling by your salespeople. This is especially true for physical stores. They can be transformed into loyal customers if they are getting a treatment and service which isn’t available on internet based stores.

E) Switchers

They are not loyal to any one brand. For multiple reasons, they keep changing their brand. Generally, this is the largest segment in terms of traffic. There is very little that you can do about them, as there is no specific reason why they leave you and prefer others. But, they are in large chunk even though they bring very little revenue.

The most you can do is treat them well when they are buying from you. Try to evoke a sense of satisfaction among them through your service and behavior. Outstanding customer experiences are a key differentiator when it comes to nurturing loyalty, after all.

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