As a survival factor for any businesses, ‘more customers’ is always the main target for marketers. Hence, many retailers tend to disregard their existing ones. The most common reason is that they don’t recognise who their most valuable customers are. Practically, when acknowledging your top priority customers, you will know who to take special care of.
Here are five metrics to classify the most valuable customers.
1. Purchase frequency
2. Average order value
3. Customer lifetime value
4. Price sensitivity
Another way to do this is to track customer purchase history during the time when sales or discounts were offered. You can try to weigh more accurately based on the amount of discounts used since some discounts are steeper than others.