Design Marketing Strategy for Best Customers, Speaker Advises

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ROSEMONT, IL -- Successful companies design their Internet marketing and loyalty marketing strategies around their most valuable customers, even if that involves alienating some customers, said Ellen Reid Smith, keynote speaker at the 27th National Center for Database Marketing Conference and Exhibition here.


Reid Smith, who spoke Monday, is the author of the book "e-Loyalty" and founder of e-Loyalty Resource (www.e-loyalty.com). She said many companies make the mistake of trying to please all customers with a generic loyalty program that crosses all customer segments and rewards customers equally for fear of alienating anyone.


"You've got to bite the bullet and say, 'There are some customers I don't want,' " Reid Smith said. "And if you really want to look at retention in terms of the higher probability and return on your high-value customers, you have to be willing to say, 'I'm not going to spend money on those low-value customers. They cost me money every year.' "


Another mistake marketers make is setting a goal to make all their customers loyal, Reid Smith said.


Instead, she said, "You need to pick and choose who you really are going to spend the higher resources on in order to make those people loyal."


When preparing a loyalty program, Reid Smith said, companies make the mistake of outlining a random sample of customers to go test, or segment customers by simple demographics rather than by customer value.


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