Marketing to “Profitable Loyals”
Why a Loyal Customer isn’t Always a Profitable One, an article in today’s Wall Street Journal, posits:
To be considered loyal, it shouldn’t be enough for a customers to feel a bond to a company, or to simply stick with the relationship. It should also require certain actions, or shopping behaviors, on the part of the customer.
In other words, loyalty and profitability are not synonymous: The proper target audience for any marketer should be those customers who actually are profitable, not just customers who visit your site often or who may have warm feelings toward your product or service.
Assuming this is true, questions arise. How do marketers encourage clients or customers to become “Profitable Loyals” and against what benchmarks or metrics are those PLs measured?
I’d argue that once a marketer can accurately label their own PLs and set benchmarks and metrics around them, it is easier for business development to target clients who may, indeed, become PLs.
Thoughts?
You’ve described a powerful 2-dimensional view of customers!
Mapping customers on an economic value dimension only gets brands part of the way there. Overlaying the loyalty/commitment dimension adds tremendous depth to the understanding of customers.
I love to help brands tap into the powerful insights that sit at the the intersection of both dimensions. They can leverage those insights to refine targeting, messaging, and media choices and accelerate brand growth. Still working out exactly how to do it for some categories, but it’s doable.
I’ve long thought about the potential in the concept you’ve described and think you’re on to something!