A few days ago one of my clients phoned me totally out of the blue. It came as a surprise because I hadn’t heard from him for over two years. The client is someone who my marketing agency has worked for ever since I first set up my company 10 years ago.
The client wanted me to give him a quotation for writing, editing, designing and printing a company magazine, something which we specialise in. I happily worked out the price for him and submitted my quotation by email the following day.
The reason for my surprise is that I had assumed he no longer required our services. I don’t believe in hassling old clients unnecessarily. After all, they know what my company does and where to find us if they ever need any work doing.
But perhaps I shouldn’t have been so surprised that he had got back in touch with me after so long. It’s actually quite common (especially in B2B marketing) for customers to leave long gaps between placing an order. In fact, within the field of customer retention strategy, there is even a name for these clients: 'barnacles'.
The name was devised by two marketing academics, Reinartz and Kumar, whose research divided loyal customers into four categories. I have outlined these below:
1. True Friends
These are the most loyal customers. They are the customers that not only bring in a profit, but also speak highly of your company and promote it to others. They are sometimes also known as ‘Advocates’ who are placed right at the top of the ‘Ladder of Loyalty’ (a marketing concept that I will explain in a blog article later this month).
Butterflies are not as loyal, but they still bring in good revenue to your company. An example of a butterfly would be a client that likes to use you for some things, but goes elsewhere for related items that they prefer to get from other suppliers.
Barnacles are very loyal, but they rarely use your services, and don't make much profit for you. This is the type of customer that always uses your company when the need arises, but they just don’t need your services very often.
These are customers that have a small amount of loyalty, but they don’t use your company very often, and could easily be persuaded to go elsewhere if they get a better deal from a different supplier.
Some of these types of customer will help your organisation to grow and prosper. But others will be a drain on your time and resources. The important thing is to decide which client fits into which category - and then to deal with them appropriately!
In a future blog article, I will explain how to identify which category your customers fit into, and focus on the strategies that Reinartz and Kumar recommend for addressing these different types of customers.
Reinartz, W and Kumar, V., 2002. The Mismanagement of Customer Loyalty, Harvard Business Review, July 2002.