As an ecommerce business owner, you likely have a vast customer database full of potential high lifetime value shoppers. But how do you systematically pinpoint your VIP buyers?
In this article, I’ll share tactics I’ve used to help brands segment customers, spotlight the cream of the crop, and optimize marketing efforts to keep them delightfully loyal. Read on to unlock simple ways to learn more about your highest potential customers.
Examine Purchase Frequency
First, let’s analyze purchase frequency over various periods. Sort customers by total transaction counts to quickly find the super shoppers.
- Look at 1, 3, 6 and 12 month windows
- Tally totals for each customer
- Identify high frequency groups like 10+ or 20+ purchases
I like to filter data to uncover buyers who’ve purchased multiple times in recent months. These repeat customers already love my brand.
Pro Tip: Create an automated VIP program to reward loyalty if you haven’t already done so.
Calculate Average Order Value
Next, segment by average order value (AOV) to surface big spenders.
- Formula for this is: Total order revenue / total transactions per customer
- Spotlight high AOVs like $100+, $500+
- Combine with frequency; a buyer who purchases often AND spends more is invaluable
It may come as a surprise to learn a small group of customers can have extremely high AOVs, making them clearly worthy of VIP treatment.
Pro Tip: Send high AOV customers special gifts or discounts to encourage them to come back later.
Analyze Total Spend Thresholds
In addition to order frequency and size, total lifetime spend can also be considered VIP customers.
- Bucket customers by groups like $1-100, $101-500, $500+
- Your top bracket will contain your ultimate best buyers
- You can also calculate as a percentile of customer base (top 10%, 5% etc)
Consider offering elite rewards like expedited shipping and members only webinars for shoppers who’ve spent over $1000.
Pro Tip: Identify your top 10-20% of customers by revenue and provide white glove service, or something equivalent in your industry.
Review Retention Patterns
Retention rate is another indicator – what percentage of customers purchase again after their first order?
- Calculate customer retention period over period
- Determine your average retention metric for your designated timeframe
- Highlight customers with better than average retention
Analytics I’ve reviewed showed customers referred to by existing buyers had 20% higher repeat order rates. For brands, I recommended a referral program to incentivize their VIPs to share their brand.
Pro Tip: Identify traits of highly retained groups and proactively target similar customers.
Double Down on High Value Personas
Now that you’ve uncovered your VIPs, get to know their preferences with surveys and focus groups. Consider building detailed personas and craft targeted campaigns.
- Send VIPs gifts, promos and personalized content
- Develop new products and services catering specifically to their needs
- Optimize website and ads to resonate with their priorities
Getting granular insight into your highest lifetime value customers can allow you to double down on products and messaging tailored just for them based on what they care most about.
Pro Tip: Align your brand identity, product selection, content and promotions to appeal to your best segment.
Results
By identifying and focusing on your newly-found VIP clusters through analytics, you can see outstanding business growth. I’ve seen results from brands such as:
- 23% increase in average order value
- 5X higher lifetime value for retained customers
- 32% growth in revenue over 6 months
The key is using data to provide insight to a marketing strategy aligned tightly to your ideal repeat, big spending buyers. They hold the key to potentially missed profits.
Recap
I hope these tips equip you to uncover your top tier clients who may be hiding amongst the broader customer base. Techniques like:
- Evaluating frequency, recency and spend thresholds
- Analyzing retention patterns
- Crafting detailed customer personas
…allow you to pinpoint and cater to surprise VIP clusters already tailored to your products. These overlooked segments can massively impact long term business growth, but remember that analytics is crucial for this discovery.
Now get out there, analyze your highest value purchasers, optimize your strategy to keep them delighted, and watch your revenue grow.