Show Me The Data: Call Your Customers Names and They’ll Like It

I have noticed how preferred airline customers don’t hesitate to take advantage of their status when they are called to board before the coach passengers. They like being called a name, whether Silver, Gold, Platinum, Preferred, Advantage, or Super-Duper Member. The early-boarding passengers had to earn their status by accruing a large number of miles flown.

Many non-airline companies have preferred, gold, and platinum membership programs. Some firms let their customers pay a small amount to join a membership club or simply allow them to sign up without requiring a minimum of total purchases. Programs such as those that offer largely unearned benefits offer no exclusivity and are unlikely to motivate higher levels of buying.

The sweetest sound anyone can hear is their own name. Everyone wants to be identified and recognized. You already have your customers’ names and use them to communicate through catalogs, direct mail, and e-mail. Your customers’ transaction history can supply you with two additional classes of names your customers will appreciate hearing.

The first is “recognitional,” a name that comes from straightforward segmentation, such as finding the top buyers of your most profitable products. Create a name for that group that will link the customers’ behavior to the products they bought, such as “Designer Gown Connoisseur.” Use the name on a dot whack or in an inkjet message beside the address of your next mailing. See how they respond. I have seen increases (varying by product type and average item price) but increases nonetheless, from telling a group of customers you know enough to look at their sales history and identify what they have bought. The customers’ previous purchases will have earned them this recognition, which can encourage repeat buying at very little cost to you.

The second name is a “premium” name such as those typical in a rewards or bonus program. While you are in your transaction history file, select four tiers of customers. The very top tier should only include 1%-2% of your file – the customers who have already demonstrated great loyalty. The second and third tiers can include steady but less frequent customers of 10% to 20% of your remaining file. The bottom tier should be all of your one-time and very infrequent buyers. Once you have these segments, tell your top group that they have earned their Gold status and need only to spend a little more to reach Platinum. Describe the Platinum program’s advantages: perhaps a special toll-free number, platinum colored identification card, and a small bonus, such as early plane boarding or another reward to help the customer do what he or she would do with your product anyway. Create scaled-down versions for your lower tiers – the silver and bronze levels. Your communication with them should recognize their status, but talk about the benefits of the platinum level, to encourage loyal buying and sales growth.

Some firms I have talked with have avoided such programs through concern over the costs of giving something away or the difficulty of managing the programs. All of their existing database structures have had extra fields to use for flagging and tracking. For the recognition program, the cost involves changing your catalog cover or adding a message. For the rewards program, companies can stop or decrease their marketing to the bottom customer tier that is unlikely to respond to recognition or rewards. Such a move can free up the money needed cover the costs of the rewards.

Take advantage of the customer information you already have and grow your bottom line by calling your customers names. They will like it and respond.

Bill Singleton, president of Algonquin, IL-based consultancy Singleton Marketing, and pens “Show Me the Data” for the Lists & Data Strategies e-newsletter.

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