The A-Z of Customer Advocacy: B is for Best Customers
Read time: 2 mins
Your biggest untapped asset might be closer than you think: your existing customers.
Research by Gartner shows that 80% of your future profits will come from just 20% of your best existing customers.
But what if your best customers aren’t who you think they are?
You might think you've cracked finding your most valuable customers through the standard RFM model. But the reality is, you could be missing out on your truly most valuable customers every single day.
So how do we identify these customers, and what does this look like in practice? Let’s take a look.
Introducing your truly most valuable customers
What you don’t know really can hurt you. Without seeing the complete picture of the value your customers are driving, you could be prioritising the wrong ones.
As our A-Z of Customer Advocacy ebook reveals, your best customers aren’t necessarily your biggest spenders. In reality, it’s those customers driving additional revenue through referring friends and family to your brand.
Let’s look at an example. Cate spends £200 a year with your brand, putting her in the lower quartile of your customer value calculation. This means she wouldn’t qualify to get your typical VIP treatment, such as early access to sales or free samples.
But what your existing data doesn’t tell you is that Cate LOVES your brand.
She loves it so much that she’s referred 10 friends, who in turn referred six more friends themselves. In total, those referrals spent a whopping £3,000, meaning the value Cate brought to your business is actually more than 15 times what you’d originally thought. Safe to say, it’s time to roll out the red carpet for Cate.
A referral chain in action
How to identify your most valuable customers
Extended Customer Revenue (ECR), a capability unique to Mention Me, allows you to identify your company's truly most valuable customers: your brand advocates.
By adding the lens of referral data, you can measure a customer’s individual spend plus the spend of the friends and family they bring along.
What makes ECR really pack a punch is that referred customers on average:
- Spend 11x more on their first order (and 8% more on subsequent orders)
- Are 5x more likely to refer others
- Have a 2% higher LTV than non-referred customers
All of this means you can segment your customer base with a 3D view of the value they’re bringing to your business. By knowing who your most valuable customers are and delivering them the best experience, you’ll nurture further advocacy that keeps them coming back and bringing their friends.
That's your winning formula to drive sustainable, organic growth through these uncertain economic times — and beyond.
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