Customers have both financial and conversation value
Most companies provide better service to loyal customers than to non-regular customers. A frequent flyer gets access to the lounge and is queuing less at the check-in. A regular diner at a restaurant will get a free drink on the house. This approach is very appropriate and makes total sense. It is based on the classic principle: you scratch my back, and I’ll scratch yours.
20-80 rule valid in all sectors
Manufacturers of consumer goods (including food manufacturers) are less aware of the 20% top consumers. Nonetheless the same principle is valid for these markets. In his book Flipping The Funnel Joseph Jaffe gives strong percentages of the turnover split at Coca-Cola. 80% of the Coca-Cola turnover comes from only 12% of the consumers. For Cola Light and Coke Zero the percentages are even more extreme: 6,5% of Cola Light purchases ensure 80% of the turnover, for Coke Zero this is 3%. Coca-Cola makes an effort to get to know these people. They are one of the few food manufacturers to have an online loyalty programme: â€˜My Coke Rewards‘. Every packaging contains a code. Consumers can enter this code on the website. This allows them to save points for discounts or all sorts of fun gifts. And that is how Coca-Cola manages to identify the frequent buyers of their products.
Most companies are familiar with the Pareto principle: 20% of your customers generate 80% of your turnover. A smart company totally pampers those 20% top customers. Mapping the financial value of customers and linking it to certain actions is a typical way of managing customers.
Turnover is important, and so is conversation value
Maintaining this important dimension is obvious. However it may be more interesting to add a second one to it, i.e. conversation value. On top of a financial value, every customer has conversation potential. One might buy few products yet be influential by means of their comments. A famous business man who flies with a given airline only once has a lot of conversation value. A youth movement leader who tries a new type of cornflakes has conversation value. Several surveys prove that a high purchase frequency and a high recommendation intention are not always aligned. People who buy little, can still have a rather high conversation value. The group of frequently buying and recommending customers is usually equally large as the group of infrequently purchasing and recommending customers, both representing about 29% of the total customer database.
The most important customers are those who have both financial and conversation value. Therefore you should look for influential people amongst your loyal customers, but do the same amongst the non-regular ones. In my new book, The Conversation Company, I encourage companies to search for under-used conversation potential, because it would be a shame to have a group of customers who are satisfied with your services but who do not talk about that to others. By actively including the conversation value of customers, you make better use of the potential.
Isn’t every customer important?
So isn’t every customer important? Of course they are! The main conversations driver is the experience with your company’s products and services. It is obvious that every customer should be served properly and correctly. If not you risk ending up in a situation where Klout scores suddenly get more attention than they actually deserve.
When your company is spreading interesting content or is searching for customers to structurally collaborate with, it may however be interesting to search for customers who have a monetary and / or conversational value. Besides: conversational value does not only exist online. Many people have no Twitter account, but do have an influence on others. Therefore conversation value should be considered in its broadest sense.
Conversation-worthy in every stage
Now that we no longer limit ourselves to involving people with a financially interesting profile in our company, maybe we should take things one step further. The majority of companies mainly invests in contact moments before a purchase is made. In other words, the conversation value of the pre-sales stage is usually higher than the conversation value in the post-sales stage. This makes sense, since companies see the first as an investment and the second as a debit entry.
Think about the purchase process for a holiday. I always love searching for fun places and great hotels. When I last booked a hotel for my holidays, I noticed there is a lot of conversation potential in that. Booking a hotel is an apex for me, but the only reply I receive is a boring booking confirmation.
Making this purchase stage conversation-worthy seems easy?
Not making every contact with a customer conversation-worthy would be a missed chance. Consumers expect a good experience during the entire purchase process: before, during and after the purchase. Furthermore you optimise your conversation potential by being conversation-worthy in every action with the customer.
In order to guarantee an excellent customer experience, all touch points of the different purchase stages need to be considered. Remember, these experiences are the main conversation starters for your customers. A good experience always entails a positive conversation. By thinking about every touch point in every purchase stage, you get better insights in your strong points and your weaker points. Ask yourself this:
- How do you make every touch point conversation-worthy? Which touch points entail many positive reactions at this point and which don’t?
- Were your company’s touch points created to meet your customers’ needs?
- Do all touch points offer a consistent experience to customers or consumers?
- Are the on-line and off-line experiences with your company identical?
- Do customers stop the purchase process at certain touch points? Why?
You can only reach a strong interpretation of the conversation value of touch points if you work in a structure where everyone is aiming for the same target, i.e. making the customer happy. In a silo structure different departments are responsible for touch points; therefore the experience is not always consistent. 12% of consumers seem to think there are major differences between the on-line and the off-line experiences with a brand. Departments should collaborate in order to create the same conversation-worthy approach in all touch points.
Implementing this story is easier said than done. It requires a new stream of thought. It means that you realize that your customers are more than the mere total of your turnover. They are people with high expectations towards your organization. Furthermore a once-off customer can have a lot of conversation potential. By optimising the experience with your products and services, you also optimise your conversation potential.