It’s clear that you need to focus a good portion of your holiday selling season efforts on your most loyal customers, and let go of clients who have proven profitless.
Jewelers of America Director of Education David Peters cites research showing the 20% of customers that account for a jeweler’s “loyal” base produce 80% of the profit, while the 25% of customers identified as “scavengers” produce just 5% of profit. Another 5% of customers -- the “crooks” -- contribute no profits at all and can actually cost money.
Peters says it’s key for retailers to clean up their customer base. Save your valuable time serving the scavengers and apply it to marketing to your loyal customers.
He advises jewelers to weed out these profit-challenged or profit-less groups:
Scavengers:
- Those that will only buy drastically reduced merchandise that produces little or no profit
- Customers who you generally only see in January, July and during advertised clearance sales
- Customers who would walk across the street to save a dime
Crooks:
- Opportunists that cost jewelers money every time they visit
- Customers who don’t hesitate to lie
- Those who often “rent” merchandise and take advantage of you, your staff and your policies
Peters adds that all customers are not created equal and that the old
expression “the customer is always right” must be replaced with the
updated, “the customer is usually right, but when they are not, we will
not give away profit that in turn penalizes our good customers, staff
and owners.”
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