A customer strategy refers to a Retailer's plan of action aimed at attracting, retaining, and growing its customer base.
It includes identifying:
- Target customer segments
- Understanding their needs and preferences
- Developing offerings and experiences that meet those needs.
A well-designed customer strategy takes into account the New customer onboarding journey, marketing and sales tactics, customer service, and support. The goal of a customer strategy is to create a positive customer experience and build customer loyalty, leading to increased revenue and long-term success for the Retailer.
🧪 Example of Customer Strategy
A Retailer can identify customer segments by analyzing the specific day and hour customers visit their stores.
For example, there could be 3 customer segments:
- After-work Shoppers: These customers visit the stores mostly on weekdays between 5:30 PM and 8:00 PM, seeking convenient shopping experiences after finishing their workday. The Retailer can ensure that their stores remain well-stocked during the evenings, and they might introduce loyalty programs with after-work discounts to encourage repeat visits.
- Weekend Shoppers: This segment consists of enthusiastic shoppers who visit on Saturdays and Sundays between 11:00 AM and 3:00 PM, making their weekend outings to explore the latest trends and styles. To cater to this segment the Retailer can host special activities on weekends, showcasing the latest products or free samplings.
- Early-Bird Shoppers: These customers prefer visiting the stores on weekday mornings between 9:00 AM and 11:00 AM. They are often looking for a calm and less crowded shopping environment. The Retailer can tailor their strategy to provide early bird discounts or exclusive promotions for new products to attract customers during the quieter hours.
An example of how a Retailer can understand customer needs and preferences can be:
- A Retailer analyzes its Wellness category and finds out that the sales are growing strongly, which could indicate shoppers are more health conscious. This could lead Retailer to create a dedicated "Health Corner" featuring organic, gluten-free, and health-oriented products.
❓What is Customer Strategy used for
Effective Customers segmentation
Customer Segmentation allows Retailers to attract the “best customer” as they simultaneously adapt their strategies according to their needs. Retailers need to examine Customers' Lifetime Value. This is why a customer who spends a little but frequently possesses a higher value to a company than a client who spends more but shops less often.
"Research from the Center for Retail Management at Northwestern University shows that 15% of a company’s loyal customers are responsible for 60% of its total sales."
Increase in retention rates
Customer retention plays a significant role in Customer Strategy. This refers back to the consumer’s lifespan. The more time is spent on a customer and the longer attention is paid to them, the more they will listen to Retailer suggestions and purchase the recommended products.
Creating a Unique Experience
Consumers have numerous options for purchasing goods, so creating a unique, high-quality shopping experience can be just as important for getting customers to come back as the products themselves. This is an area in which Retailers can have an advantage over larger competitors. Because small Retails have fewer customers than large ones, they can spend more time giving personalized assistance and creating strong relationships.