There are 2 important customer types in retail that you should pay attention to the most. Because once you understand these two customer types, you’ll be able to execute marketing, store events and promotions that serve each type the best – which leads to more sales and profit for you.
When I share these two types with store owners, I love to use the analogy of Thumbs and Pinkies…
Identifying the 2 Important Customer Types
Let’s do a little exercise! Put both your hands up in front of you, fingers spread wide.
Now fold down your fingers so all you see are your thumbs.
Your thumbs represent your very best customers – Because 80% of your sales come from only 20% of your customers.
Also known as the 80/20 Rule, or “The Pareto Principle” which says that for many outcomes, roughly 80% of consequences come from 20% of causes
Customer Type #1: Your Thumbs
This is why we refer to your best customers as your Thumbs. Your thumbs buy full price merchandise, come back often and they rave about you to all their friends.
You can probably think of a few thumbs in your business right now, am I right?
They really don’t care much about sales. They are not bargain hunters and they don’t always respond to “sale” language.
This customer type would much rather pay full price in order to get the newest styles and your excellent, personalized customer service, than being in a big crowd during a sale.
Customer Type #2 Your Pinkies
Your Pinkies are your sale customers. They love a deal, the hunt of a bargain and the thrill of a discount. We love our Pinkies! They are essential to every successful retailer because they help us move out old merchandise, putting cash in our pockets!
So when we are running a sale, we’re not talking to our Thumbs. Instead you must talk to, and sell to, your Pinkies.
But don’t make the mistake of thinking that you can just do any kind of sale and your Pinkies will come running. The secret to move the inventory you want to move, improve your cash flow and protect your margins – is tailoring your sale, and your message, to your Pinkies.
The words you use matter. The timing and length of your sale matters. Your markdowns and your merchandising matter. To move the most old inventory out, to sell the most and to serve them best – you must give your Pinkies what they want. What they expect.
Customer Type #3 The Middle Fingers 😉
I’ll never forget the time I was sharing this information during a speaking event, and in the crowd I saw an arm raised by a sweet lady that looked like a grandma. “But Cathy” she said, “What about the middle fingers?”.
The crowd burst out laughing as did I – so OF COURSE the middle fingers deserve now an honorary mention every time I talk about the 2 important customer types.
The middle fingers represent everyone else in your customer base – they’re the peanut gallery, the ones that make the most noise, but don’t spend enough in your store to earn a vote in your inventory or marketing strategy. Of course you’ll always treat them to the amazing customer experience everyone who shops with you get – But you won’t be basing inventory, marketing or policy decisions on their demands.
In the Inventory Management and Grow Your Traffic steps inside our Sales Breakthrough System we dig deeper into how your strategies should change depending on if you’re focused on your Thumbs or your Pinkies. Watch my free training here to see how the Sales Breakthrough System works to help you grow your sales.