I wrote this post quite a few months ago and to be honest I can’t quite remember why I didn’t publish it at the time.
Cleaning up some old files yesterday, I came across it again and remembered the point I was trying to make. So here goes.
Placing Value on Loyalty for a Great Guest List.
Each year, usually right around Spring time, the party seasons steps up a notch with Spring Racing Carnival, End Of Year client celebrations and various events and launches. These businesses start to spend much time creating guest lists, and preparing invitations for current and potential clients.
When creating your guest list for an exclusive event, it’s extremely important to define the criteria required for potential invitees.
Current clients only? Only the biggest accounts? The most likely to buy again in the next 6 months? These are all valid points, however they overlook some important points. Longevity, loyalty and the likelihood to continue a relationship with you must also be part of your selection criteria.
A friend of mine owns a very successful small business, and has been a client of an advertising agency for the past 40 years. He is by no means the biggest client they have, with an average spend per week of around $500, or a total of $26,000 per year (the amount has been averaged over the 40 year period).
The criteria for guests to be invited to the advertising agency’s client VIP marquee for the local Cup race day is the top 10, or advertisers that exceed $50K per year.Clearly my friend does not meet the criteria to be invited to the agency’s VIP event.
However, a quick calculation of approximately 40 years of weekly ½ page newspaper adverts comes to an advertising investment total that exceeds $1,000,000.
Does this mean that a newer client, say 3 years old, who spends more on a weekly basis (totaling more than $50,000 per year) has more value that a 40 year account? This 3 year old account has now invested $150,000. Let’s now say, that we feel that they will continue this investment for at least another 3 years. Now the client is worth $300,000.
That’s still a long stretch from the $1,000,000 already contributed by my friend.
Another observation to consider is the reliability of the 40 year account. 40 years of a reliable spend, no reductions, no breaks, just consistent investment week in week out – this reflects some serious security. It would be fairly safe to assume that the business will continue with this pattern for years to come. Do you have the same evidence that the new business will have the same loyalty and longevity?
So who is the preferred guest to invite?
The answer is both. Reward your big clients, but also reward your loyal or proven accounts too.
Another client of mine describes it well:
“You always get excited when a new big spending client comes to you, and imagine all of the possibilities… Buy you have to remember, the little ones who have been with you through thick and thin, who have followed you through price rises, business changes and the times that you don’t quite get it right, they are your bread and butter. You need them to survive.”
The criteria for guest lists should include the following considerations:
- The financial investment they have made in your business
- Duration of the relationship
- Future potential for growth of the account
- Loyalty shown. Has anyone stayed with you even though a competitor may have offered a better deal?
- Recent transactions – is a long term sales history beginning to stall? Or do you need to add a little wow factor to a new relationship?
Previous or lost clients should also be considered. Is there anyone you haven’t heard from for a while? Is it worth inviting them into your celebration to reconnect?
Client events are a marketing tactic to increase opportunity and develop strong connections. So don’t just think about who IS attending, think about who ISN’T – and if that’s really the best way to help your client relationship.
(And always enjoy the party!)
Thanks for listening! Kath.
Tough Cookie Marketing – turning small businesses in to Superheroes. www.toughcookiemarketing.com