The curse of loyal customers

Your market is bigger than you think

Today’s topic is brought to you by actual quantified research on consumer behaviour.

The majority of customers who buy from you are occasional buyers.

Some customers buy from you more than occasionally.

Some customers – the so-called loyal customers - buy from you regularly.

So if most of your customers don’t buy very often, but the sheer volume of them makes up the bulk of your revenues then shouldn’t you be trying to market to this market?

Offering discounts for loyalty works to a degree. If you are in a competitive market then bulk purchase discounts may be necessary. But if you are talking about a regular buyer then it doesn’t make sense to offer discounts unless they are also bulk buyers.

If you build your customer base on regular repeat business, then you are likely only serving a small part of your potential market. Where are the large number of occasional buyers? You are probably putting all your eggs in one basket – not a great way to grow the business.

Put that another way, your whole business is now being held hostage to the whims of a handful of customers. This is fine in the initial stages of growing a business as you need the cash flow and to prove your products. 

But you also need to get past that pretty quickly.

Go chase the majority.