You have four different types of customer and it is vitally important to understand the differences. In my seminars across the UK and abroad I repeatedly stress this key business principle using an animal analogy. The four types of customer are butterflies, loyal hounds, ‘dumb asses’ and blind bats.

Butterflies flutter between you and your competitors, loyal hounds only buy from you, dumb asses only buy from your competitors and blind bats do not buy from you or your competitors. Butterflies and loyal hounds are your existing customers, dumb asses and blind bats are your potential customers.

It is extremely important to understand this key principle, as you need to have a range of targeted strategies and tactics to keep your existing customers and attract new ones.

Research highlights that the cost of winning a new customer is seven to ten times higher than keeping an existing customer. It is also important to note that it is far easier to lose an existing customer than it is to win a new customer.

Your competitors want your butterflies and loyal hounds, so keeping them coming back to you is vital to your business. One simple, powerful example of a targeted customer retention strategy is ‘checkout promotions’ with time-restricted offers incentivizing your customers to return to you. Your promotion offer can be printed onto your customers receipt or given as a separate voucher.

The time-restricted element is key in motivating your customers to return and it also minimises risk of outstanding promotion cost liability. For example when your customer visits and buys from you, your checkout promotion could give an offer valid only for the next seven days, incentivizing your customer to visit you again within the seven days. Your promotion offer could for example be a discount or other value concept, which can only be retrieved on a return visit within the specified time period.

The strength and attractiveness of your checkout promotion offer will determine how well you motivate your customers to return.

You will find this promotion concept widely used in competitive sectors such as grocery and DIY multiples, as world-class businesses recognise that butterfly customers are targeted by competitors.

The vast majority of your customers are butterflies, which can be attracted by your competitors. Using check out promotions with time-restricted offers is a simple, practical promotion strategy to motivate your customers to keep coming back to you.
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About the Author

John Silvestro

Business Coach and Speaker
John Silvestro started his career in the 1980s as a health foods retail consultant. Since then he has become an acclaimed business coach and speaker, having worked with consumer-focused companies in Britain, the USA, Canada and South Africa.

Articles by John Silvestro
John Silvestro
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