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Tips on Selling

Put your resources into loyal shoppers.
Put your resources into loyal shoppers.

Are all customers truly created equal?

When it comes to dealing with different types of customers, DAVID BROWN reveals the surprising shopper category where retailers should be expending most of their energy, in order to get the best returns.

No, I haven’t been reading George Orwell’s Animal Farm – from which we get the famous quote, “All animals are equal, but some are more equal than others”. And yes, you should treat every customer as if they are worth gold to you.

But you haven’t got enough hours in the day for everybody and everything you have to do.

Retailers who can recognise their most important customers will be able to concentrate on this minority, who in reality give them the majority of sales.

Identify your shoppers

The first type of customer is the one who frequents your store only occasionally, and perhaps even only once. You don’t know them and they don’t know you.

They are presumably not lovers of jewellery and may be visiting for one of a few reasons: they could be making a once-in-a-lifetime purchase such as an engagement ring or they might be dropping in to take advantage of a promotion like an annual sale or discount offer.

These customers have no loyalty or desire for a relationship with you and sometimes can cost you more than they generate in revenue. They may represent half of all jewellery customers who come into your store and yet they only contribute 30 per cent of your revenue – and even less of your profit due to the lower margins and the cost of acquiring them.

Another type of customer is the ‘client’. These people are reasonably regular shoppers. They know you and you know them. They may represent about 40 per cent of the people who visit your store and they contribute around 40 per cent of your store’s sales.

"Enthusiasts love you because you love them back, often without knowing it; it is a mutual-admiration society – if you want to grow your sales, look after the enthusiasts"

The client can sometimes be hard work, particularly when it comes to discounts, but they are repeat visitors. Although they are not restricting their spending to just your store, they are accustomed to shopping with you.

The third and most important type of customer is the ‘enthusiast’. These people make regular visits to your store and love jewellery immensely. You are often on a first-name basis with them and they generate lots of revenue and profit for you.

They’ve probably written reviews for your website – if they haven’t, it’s time you asked them – and they’re almost certainly fans of your social-media pages.

Enthusiasts will represent under 10 per cent of your customer base but contribute more than 30 per cent of your sales and even more of your profit, as you don’t need expensive marketing to get them through the door.

They love to see what new items you are offering and they love to tell their friends about their purchases. These people are a walking endorsement for what you have to offer.

Getting it right

Handling each of the shoppers listed above can take some finesse. Firstly, let’s focus on the enthusiasts, those who are your lifeblood. What is the real reason they buy from you? There may be all sorts of reasons but the predominant two will be that they are passionate about jewellery and your store – and staff – makes them feel special.

If there is one human trait that motivates everybody, it is the desire to be recognised and valued.

These customers may say they shop with you because of your competitive pricing or unique product lines, but you and I know the same product can usually be found elsewhere, often at better prices.

Enthusiasts love you because you love them back, often without knowing it; it is a mutual-admiration society. This means if you want to grow your sales, look after the enthusiasts as if your life depends on it.

In addition, concentrate on finding more of those clients who are passionate about jewellery and who want to feel special when they shop.

The more care you put into enthusiast, the more often they’ll visit and the more they’ll spend. Even growing your best clients by one to two per cent could be adding as much as five to 10 per cent to your sales and at least the same to your bottom line.

Remember, marketing to them is easier and cheaper and they are often less likely to ask for discounts.

There are so many retail businesses that treat their customers with indifference. Adopt this simple philosophy and you’ll be surprised at the impact it can make on your sales.

David Brown

Contributor • Retail Edge Consultants

David Brown is co-founder and business mentor with Retail Edge Consultants. Learn more:

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