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Never Spread Your Marketing Spend Evenly

By Jeanne Roué-Taylor

Marketers shouldn’t spend their customer loyalty budget evenly across all channels or programs. Similar to other aspects of business, there are places where large ROI can be earned by spending disproportionately higher amounts—simply spreading efforts and funds evenly means missing out on those opportunities.

The High-Value Customers

Take as an example the disproportionate way high-value customers are followed and treated. We know that spending more to develop the relationship with a high-value customer not only creates a stronger connection, but also provides marketers with much better knowledge of preferences, propensities, and other insights.

A better relationship with a high-value customer has significant benefits beyond simply higher lifetime customer value. With better information, marketers can far more easily pick up important signals that include life-changing events and an increase or decrease in the frequency of visits. When a high-value customer’s normally stable signals change, there’s an opportunity to solve a problem or find a mutual benefit from the change.

In some cases, a quick response to those signals can save the relationship from moving toward lower levels of loyalty or customer attrition.

Spending disproportionately is the only way to be sensitive to the relative value of different channels and programs. It’s the only way to get the most bang for your marketing buck. To learn more about other factors of success in retail customer loyalty, check out our webinar on the topic: Nudges, Influences and Rewards Part 2: Must-know Factors for Success in Retail Customer Loyalty.

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