5 Types of Customers

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Increase Loyalty to Increase Sales!



In the retail industry, it seems as though we are constantly faced with the issue of trying to find new customers. Most of us are obsessed with making sure our advertising, displays, and pricing all “scream out” to attract new business. This focus on pursuing new customers is certainly a good idea and necessary but, at the same time, it can wind up costing you money and having anything to show for it.  Therefore, our focus really should be on the 20% of our clients who currently are your best repeat customers.

In retail, this idea of focusing on the best current customer should be seen as an on-going opportunity. To better understand the rationale behind this and to face the challenge of building customer loyalty, we need to break down shoppers into five main types:

  • Loyal Customers: They represent no more than 20 percent of our customer base, but make up more than 80 percent of our sales.

  • Discount Customers: They shop our stores frequently, but make their decisions based on the size of our markdowns.

  • Impulse Customers: They do not have buying a particular item at the top of their “To Do” list, but come into the store on a whim. They will purchase what seems good at the time.

  • Need-Based Customers: They have a specific intention to buy a particular type of item.

  • Wandering Customers: They have no specific need or desire in mind when they come into the store. Rather, they want a sense of experience and/or community.

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If we are serious about growing our businesses, we need to focus our effort on the loyal customers, and merchandise our store to leverage the impulse shoppers, the other three types of customers do represent a segment of our business, but they can also cause us to misdirect our resources if we put too much emphasis on them.