A client who consulted me about how to revive his once profitable business, revealed to me that he had the following dilemma. He had recently spent money on a new more prestigious advertising campaign that was part digital and part print advertising, in order to pitch to the right type of client. The result was not what he had expected because instead of getting a higher value client, he was still getting the same type of client who did not appreciate what he was offering. It also seemed to him that it is often the same client who negotiates the lowest possible price that also tries to squeeze the most they can from the sale and not give him repeat business. The answer I gave him was that the success of the campaign lies in conveying right message. To create a relevant message one has to appreciate an important marketing concept. There exists two types of clients: A transaction client which means the client is only interested in the transaction at hand. They will always look at the price tag and their biggest fear is paying more then they want to pay, or more than someone else paid. They have the time to shop around for the best price because they are often not in the position to pay more money, and consequently their time is not worth enough. They usually do their own research and do not value your opinion. They want a product not a service, and their main goal is getting the best price. The other type is a relational client. The relational client is interested in building a relationship based on trust. He values time and appreciates the value of a marketing expert who will spend the time to research the best option for them. The marketing pitch that will turn the greater profit is one that is tailored to the relational client. If you can offer a superior service or a time saving device that others cannot offer for less money, then the rational client will appreciate that and purchase your product or service at a premium without quibbling. He knows that it will save him time and his time is more valuable than to be spent looking for the same thing cheaper elsewhere. They consider time spent shopping elsewhere as part of the purchase price.
The ideal type of marketing effort therefore is geared towards creating relationships. Reward and loyalty programs are relational type of marketing avenues. The quality of the presentation of your store or online presence is much more important when it comes to attracting the relational buyer as they will be looking for quality and trust. As Albert Einstein purportedly said “Try not to become a man of success. Rather become a man of value.”
Research shows that on average half of the shoppers will be transactional and the other half relational so do not discard the transactional shoppers. There exist ways to gain loyalty from them too. Most business people do not realise that marketing can continue after a sale. If you follow up with a client with things like satisfaction surveys or offers you can gain loyalty from all types of shoppers.
It is surprising how many reward programs that offer very little in monetary value can sway a shopper to buy in one supermarket over another simply because they have the supermarkets loyalty card.