Look like one of your demon clients?
We are all too happy to identify and focus our marketing towards our best clients. It is the way to get more of them, right? But, what about the bad customers - the ones who are time wasters, low return and even cost you money when they purchase? What are you doing to repel them?
“Repel clients? I can’t do that. Even a bad client is better than no client.” Well, probably not. Here’s an example to drive this point home. A national electronics retailer identified that a small but annoying segment of their clients only purchased high end, loss-leader items with manufacturers rebates. They would process the rebate, then return the item to the store and then buy back the same item at the even lower “clearance price”. These items would end up on certain EBay storefronts at a great price, but still a profit for this demon client. So how do you end this behavior? They implemented a 15% restocking fee for returns and only do not sell returned merchandise at the same store. Demon exorcised!
I just went through this process with a retail client that hosts kids birthday parties which are a significant part of their sales. However, we identified there was a segment that just wanted the space and to bring in their own food. Since the margins are mainly on food, that wasn’t a client she wanted to attract. So, she implemented a $50 charge to bring in outside food. Demon exorcised!
Of course, this all assumes you are paying attention to which clients are treats not tricks. Sometimes they are lumped into a demographic group and skew the overall numbers. For instance, this same client is open daily for breakfast, lunch and dinner with tumble time. Stay-at-Home-Moms are a good share of her business, however she wondered why they weren’t spending more on food. After a little analysis, we identified that there were two types of SAHM’s that visited: easy going ones that loved her place, came weekly and spent money on food. The other were self proclaimed “super Moms” that wouldn’t dare be seen feeding anything they didn’t make themselves to their child. That sub-set didn’t spend beyond the play space admission. (They don’t even drink coffee! Definitely demonic.)
When analysing your very best customers and how to direct more marketing effort towards them, don’t ignore the demons. They could be lurking in your showroom right now! (Crosses and holy water are optional unless you cater to lawyers.)
