You know it as the 80-20 rule but it’s really called the Pareto Principle. Who cares? If you’re in marketing, you should, because it shows up in many market categories. From CPG to apparel, for many companies, the 20% that are their best customers make up a significantly larger portion of that company’s revenue and profits.
These few are a brand’s elite customers. Not necessarily defined by purchase frequency, they are nonetheless the most passionate. Even brands in categories you wouldn’t expect people to get passionate about have a discreet set of obsessive customers who are indeed deeply engaged. A recent article in the Harvard Business Review called Make Your Best Customers Even Better drove this point home convincingly so I will spare you the substantiation here.
By the time I finished the article though, I had a nagging question in my mind. Why do so many brands target their primary “consumer engagement” tools (e.g. social media efforts) at the widest audience possible? Actually, I have an answer; I think it’s because most marketing still operates under the influence of mass media thinking where quantity is the holy grail of ROI. When you’re spending big bucks on big media, you want the most bang you can get. What’s your reach, viewership, readership, circulation? Those are the first questions out of every media planner’s mouth. It’s not surprising then, that as marketers started dabbling in social media – and social media started grabbing users in the millions – the conversation naturally drifted toward these familiar drivers.
But if a company’s best, most profitable customers are an elite subset of the whole…
…and a company that engages this subset well has the best opportunity to turn them into vocal evangelists…
and vocal evangelists are the most powerful marketing force (in terms of persuasive capacity)…
well, isn’t there some wisdom in thinking about how at least part of a social media strategy might be aimed exclusively at this subset?
Yet I find very few examples of this. Most social media activity is open for everyone and a company’s best customers are treated more or less like average customers in terms of access, opportunities and incentives. They all count as fans or followers. They all see the same posts. They all get the same opportunities to enter the same sweepstakes. In essence, the brand foists all the responsibility for being a “best customer” on the customer without providing much incentive – from an engagement standpoint – to do this.
Why wouldn’t you have a separate, secret, member’s only Twitter account for customer service at this elite level?
Why wouldn’t you invite a select group of your best customers to participate in a closed Google hangout to talk about new product ideas?
Why wouldn’t you make some tabs on your Facebook page accessible only to the elite few with the proper credentials?
There’s nothing like a nightclub with a long line outside to stir up demand. In fact, scarcity is one of the most powerful persuasion drivers (which is why, for example, perfume bottles are small – the size makes them seem more precious, valuable and desirable). So why aren’t more companies creating special, exclusive programs instead of just running another hum-drum promotion where everyone gets the same coupon and a whack at the same mid-range prize?
These middle-of-the-road, ione-size-fits-all, everyone-is-invited activities tend attract a different kind of “best customer” – the pro-am sweepstakes player. This person is at the exact opposite end of the spectrum for those highly-engaged true brand advocates. These professional sweepstakes – and you might be surprised how many show up in the server logs of big promotions – are the ones who sets up multiple email accounts and play as many sweeps as they can in a day. Just like the marketer who views the internet as a mass play, they are all about the quantity of games they play because they know that the more often they play, the more likely they are to win. And given how easy it is online to create tens or hundreds of identities, playing the numbers isn’t even all that much work.
These people represent the worst possible outcome – someone who participated in your marketing tactic with no real interest in your brand, your message or your value proposition. They get their information from websites like SweepsAdvantage.com. You were just one of 50 sweepstakes they entered today. These people skew your data. They make your vanity metrics seem high, yet represent nothing more than a fleeting, dispassionate transaction dressed up in the often-inaccurate lexicon of social media: friend, fan, follower.
For my money, I’d say its worth peeling off a piece of your social media budget and investing it in a program for the people you know not only buy your brand, but love it and even try to sell it for you on your behalf. Doing this means treating them as the special subset they are. And leave everyone else out.