Many companies have a set of loyal, primary customers who give most or all of their business to that company. This can be true for small businesses, such as a dry cleaner or design firm as well as large corporations operating across the world. Not surprisingly, these “big fish” usually command the highest level of service and attention.
We often find that much less is understood about a company’s secondary customers. Yet, motivating just a small percentage of these secondary customers into incrementally increasing their purchases can have a significant impact on a company’s bottom line. More importantly, it’s generally easier and more cost-effective to move a secondary customer into a primary customer than it is to bring in a new prospect.
Identifying Secondary Customer Potential
A company often understands its primary customers fairly well because of the frequent or long-term interactions with sales reps, customer service and other staff. Sometimes a company has key account managers who work closely with these primary customers or they have customer councils composed of the top customers. Many times these primary customers are active on the company’s social media accounts.
Identifying how you can increase business with secondary customers can be accomplished through surveying or interviewing. Ask what providers your customers use and which ones they consider to be their primary providers. Ask what percentage of their business they give to the different providers they use. Often, customers may feel more comfortable sharing this information with an outside research firm.
Keep in mind that, in most cases, identifying your secondary customers can’t be done simply by looking at their purchase history. You might have customers who have not spent that much with you and assume that they are secondary customers when, in reality, they are giving you more than 75% of their business. On the other hand, you can have customers who are buying a substantial amount which, on the surface, may seem like it qualifies them as primary customers, but actually you are getting only 30% of their total purchasing.
Top Challenges with Secondary Customers
It is not unusual for satisfaction scores to be lower for this group. Sometimes they report slower response times to requests or problems, or they see their sales representative less often. In some cases, they view their relationship with the company as buyer-vendor instead of a true business partnership with people who truly understand their needs.
Many times, it can be a chicken and egg situation. Are the secondary customers justifiably treated differently because they actually aren’t as critical to the company’s success? Or is the way they are treated causing them to be secondary and not primary customers?
It is important to know what these secondary customers value and expect. They may be different in some ways than your primary customers, and accommodating for these differences is important to gaining their loyalty and a greater share of their wallets.
As resources allow, make it a priority to give your secondary customers the same level of attention, communication, and assistance you deliver to your primary ones. Clients we work with have made this change and have seen results.
Benefits of Moving Secondary Customers into Primary Customers
Understanding your secondary customers and building a strategy to improve their customer experience will pay off in multiple ways. Beyond the obvious impact on sales and profits, primary customers are typically more loyal and more likely to recommend you to others. And when there is an issue or problem, they are more willing to work it out and less likely to switch to another company.
Vernon Research Group has a long history of helping companies, non-profit organizations and government agencies understand their customers, members or stakeholders. Get in touch if you’d like to discuss how market research can help you strategize for greater success. For more information about how market research can improve lead generation, customer acquisition and retention, you can download our Free eBook, Using Market Research to Improve Lead Generation.