Driving Engagement with Middle of the Pack Customers

June 26, 2017 Catherine Malone

The definition of “middle of the road” refers to attitude or action rather than quantity. When we talk about customer loyalty, brands tend to focus heavily on their “best” customers—their VIPs. Brands cherish customers who love them and want to talk about them. They want to find ways to make these customers even more valuable.
 
Yet since organizations are so focused on their VIPs, they end up concentrating less on other customers. While it is important for brands to retain their most engaged consumers to reinforce loyalty, there’s value to identifying and prompting other customer segments.

Building A Pathway from The Middle Ground to VIP Status

To obtain the most out of customer-to-brand relationships, companies must understand their customer profiles. Brands should first define what qualities and behaviors represent high-value customers. They should also understand what inspires consumers to engage in these behaviors. Lastly, companies should know which segments will most likely respond to incentives to shift from low or average value behaviors to high value engagement.
 
Fortunately, brands can use data to make critical decisions about how to engage their customers. When dealing with average spenders, companies have an opportunity to test loyalty strategies and identify what moves customers away from casual, ambivalent brand engagement and into a state of enthusiastic advocacy. To accomplish this, brands should develop a data-focused engagement strategy that centers on three phases—definition and segmentation, targeting and testing, and measuring and reiterating. In each of phase, brands can better understand their goals and those of their customers.
 
1. Define and Segment
 
First, brands should segment their average customer base by a set of defined attributes. What are high-value behaviors, and how many must be in play to define a customer as “high value”? What does a brand’s average customer really look like?
 
To answer these questions, brands must understand their own value and priorities and analyze the raw numbers behind their customers’ behaviors. This will help organizations better understand who they are dealing with and, hopefully, how to influence them. Some factors brands may consider to determine customer value include total annual spending, social media activity, frequency of purchase, number of referrals, and more.
 
Once brands identify the factors that are most meaningful to them to define customer value, they can begin to measure what their customers are doing and when. For example, companies can develop a tiering strategy as part of their loyalty program or engagement strategy. This will offer insight enabling brands to create a segmentation structure, which is critical to targeting various customer bases and successfully testing different campaign initiatives.
 
2. Targeting and Testing
 
Once brands determine the qualities of their average customers, they should implement specific tactics designed to increase customer value. Brands can use a number of marketing strategies to incentivize customers to take a specific action. This can include sending a coupon or discount offer a future order, or surprising and delighting customers with an unexpected offer—unanticipated rewards, privileges, or a simple thank-you to spur interaction.
 
Whatever the strategy, it should be done with the intent of understanding what drives customer interactions the most. In implementing a targeting strategy, brands may want to begin with a smaller control group to test before broadening the public access to their campaign.
 
National specialty retailer J.Crew is one brand that uses surprise and delight campaigns to engage its customers and gather insights about behavioral trends across its customer bases.
 
The retailer invites customers to discounted, exclusive events that take place after store hours. By tying incentives and exclusivity together, J.Crew remains top of mind with customers. Not only is J.Crew able to influence customers to move into a higher-value bracket, but also it observes how those customers spend and why. All of this information is relevant to the next step.
 
3. Measuring and Reiterating
 
Brands should measure the Return on Investment on their segmentation and targeting efforts. The spending information and data derived from segmenting and targeting customers will likely seem valuable on their own, but the best way to track success is to measure ROI after implementing a specific campaign.
 
One way to accomplish this is to benchmark against a control group. With respect to the middle segment, brands might target a sample of their average customer base to test a campaign and then compare the differences in behavior between the control group and the rest of the base.
 
For example, brands might try to determine how factors such as total annual spending, social media activity, and the number of referrals changed in the sample group among their average customers. Information derived from this measurement can be used to iterate future campaigns.
 
The bottom line

It’s important that brands examine customer data carefully and test marketing initiatives to give customers who aren’t VIPs the chance to demonstrate value. While not every customer will adopt high-value behaviors, companies will discover that they have more passionate fans. By giving segmenting customers and giving them an extra “push” toward desired behaviors, companies can create opportunities for engagement and retention that extend the Point of Purchase. This will help organizations build lasting brand-to-customer relationship that will increase in value and loyalty over time.

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