I recently talked to the executive team of a prominent financial services organization discussing their plans to upgrade their customer profile from beginner to advanced user.
While seeing higher transaction frequency, higher average dollar values per customer and a higher lifetime customer value seem like obvious goals, this isn’t a gimme. Other competitors want the same thing and the question becomes who’s better equipped to deliver. If some competitors spend four times as much in media and invest heavily in tools for advanced users, that may give them a leg up.
Being a passionate soccer player, I know a thing or two about leveraging one’s strength. If you have an excellent striker on your team, you use him and support him through the wings. If you have a strong defense, you destroy the opponent’s game and rely on a few counterattacks to win the game.
There may actually be nothing wrong with sticking to the beginner segment, following them along the lifecycle as they mature and varying the service offerings to stay their default choice: from first job, to marriage, to first child, to first house, to first college student, to divorce, to retirement planning, etc. Of course, you need to be smart about catching them early on in each stage – or they may fall into the arms of others. Never a dull day in marketing, is there?
You can even use your beginner customers to recommend you through a well-orchestrated referral program and you will become a more meaningful part of their life and network.
If your industry category is fairly commoditized and highly competitive, growth may come less from adding different kind of customers, but through increasing your sphere of influence from within your core market. And as long as your target universe is sizeable enough, and the industry category is growing as well, it’s good to carve out a niche that others don’t seem to be that interested in or have less credibility in.
You can always test your way into the advanced user segment, perhaps you may even consider a separate premium brand if you find early success, but be careful not to do a “180” on your core product or service all too quickly. Rather, stick to your loyal base and grow with them.