A customer loyal for a lifetime could spend a fortune with you, says Steve Dunne, executive chairman of Brighter Group
What would you do if I arrived at the doors of your organisation and announced that I had quarter of a million pounds or more to spend and I wanted to spend it with you?
I suspect that you would pull out your most comfortable chair, decant your finest vintage port or sherry and arrange for a private limousine to take me home once our meeting was finished.
You might even call your chief executive or managing director and ask them to pop by your desk to meet and greet a very important client with lots of money to spend.
Now here is the interesting thing: every day in the travel industry that scene is likely to be unfolding. Well, a part of it is – the bit where someone arrives at your desk with the potential to spend quarter of a million pounds or more with you.
The thing is, most organisations don’t react in the way I’ve just outlined.
Lifetime loyalty
While a customer will arrive at your door with the potential, and even the will, to spend quarter of a million pounds or more, they will rarely do it all in one go. Instead, they will spend it with your brand across the course of their lifetime.
Marketers refer to it as “the lifetime value” of a customer.
The travel sector is littered with brands that have positive straplines about customer focus and the value they place in customer relationships.
But how many of them talk to their staff not just about service but about lifetime value?
Sometimes, when a customer complains, the gripe can, in the big scheme of things, appear trivial or pedantic. And it may well be that the issue in question is indeed trivial. But it won’t be to the customer.
A friend of mine, who is a loyal customer of a very famous travel brand, had been asked to pay an additional ?$99 for something that had previously been free.
Apparently, there had been no warning that a charge would be applied.
They complained to the front desk. The receptionist said they would let head office know but, beyond the polite smile and kind words, didn’t gauge just how disappointed my friend was.
A form on the computer was filled out and my friend walked out the door.
Six months later the brand has made no effort to communicate with this disgruntled, previously loyal, customer.
And the previously loyal customer, worth easily a quarter of a million pounds in lifetime value, is booking summer 2016 with a rival brand. All over $99.
Spend wisely
Brands spend a fortune every day trying to lure new customers to join them, and pay fortunes to advertising and marketing agencies for upbeat customer service straplines.
But for me the lesson is clear. Train your staff, not just your marketing department, about the lifetime value of customers, and repeat often the old adage: it is far easier to keep an existing customer and get them to spend more than to recruit a new one.