When Choosing Customer VIPs, Is It Time To Ignore Purchase History And Focus On Social-Media Clout?

Written by Evan Schuman
August 17th, 2011

It’s a time-honored retail tradition to identify—and try and pamper—the group of best (most profitable) customers. But social media has provided a new way to define VIP shoppers, with “most influential” having the potential to trump “spends the most.”

Consider: Who do you want to take care of first and in the most boot-lick fashion? The person who personally spends $100 thousand a year with your store or someone whose friends and followers spend a total of $25 million? Is someone with a huge number of Twitter followers, Facebook friends or a popular shopping blog more worthy of the royal treatment than someone who personally spends a lot? Granted, there are shopping carts full of complexities and nuances in analyzing such profiles—generating a meaningful influence rate, if you will—but that’s where the fun comes in.

Even worse, beyond those analytical complexities, there’s the issue of how to get this data in front of the eyes of store associates and also how to do it in a timely matter. Of course, to start things off, there needs to be a reliable way to identify these influencers as they enter your store.

The practical matter of this issue is that it isn’t very practical today. But as retailers get more creative about how to leverage the tons of superb social data out there, ways will be found to access and make use of it. For starters, let’s craft the laboratory theoretical data model perfection scenario.

Ideally, the influence would take into account four things: number of followers/friends; amount spent in total by followers/friends; how well the influencer’s advice is followed; and the uniqueness of key followers.

  • Number
    The sheer number of followers/friends is crucial, but this point would also factor in who they are and, of course, how many of them are currently your customers or realistic prospects.

    Otherwise, Macy’s North America might label someone with one million followers a VIP, only to discover that most of those followers are seismic engineers throughout Australia, South Africa and the Middle East.

  • Amount Spent
    For categorization, the easiest way to deal with this point is by adding up all of the purchases at your chain (or at rival chains—business that can be stolen). But it needs to be more nuanced than that. Does it also need to factor in average spend, for example?

    Even a combination of average and total spend may not be that meaningful unless there is also data about whether a high percentage of those sales are made a by a relatively small number of friends/followers.

  • Followed Advice
    This point gets at the heart of influence. If someone is zapping out messages to an installed base and prospect list of five million, is that person worthy of VIP distinction if his/her followers aren’t apparently listening?

    Consider the extremes: Do 80 percent of the followers react within two days to any suggestions made by the influencer or do 95 percent of the influencer’s suggestions get ignored by 99 percent of the followers?

  • Uniqueness
    Are those following this supposed influencer people who you are already reaching? Perhaps by traditional means and perhaps through the lists of other customers?

    Influencers who are followed by groups of hard-to-reach prospects (such as older high-net-worth customers, perhaps, or intense fans of a particular type of product) may merit a lot of points.

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