[Exceptional Influence] Love Your 150s and Build a Loyal Customer Base
How to build a loyal customer base (or client base!) by taking care of your most loyal and returning customers.
Kevin Kelly, the founding editor of Wired magazine, once postulated that you only need 1000 true fans to have a sustainable business. The principle is very simple. If you have 1000 true fans who buy everything you create – and you create say $100 a year worth of products or services – then you will earn enough to have a sustainable business.
Seth Godin loved this idea. But expanded it to say that ‘you need to alter what you do and how you do it so that 1000 true fans is sufficient to make you very happy.’
Like Seth, I agree with Kevin Kelly’s theory. But when it comes to those of us running a practice, then I think that the number of fans (1000) is less important than the amount of money per fan or customer. So for those of us running practices or businesses that sell more expensive services or products, I believe that it’s the 150 ‘true fans’ or loyal customers or clients that are needed.
Love Your 150s and Build a Loyal Customer Base
The number 150 comes out of the work of social anthropologist Robin Dunbar who posited a layered approach to relationships. His theory was that we have 15 good friends, 150 meaningful contacts, 500 acquaintances and 1500 recognisable people. It’s these 150s that form the base of your loyal customers, and a business or practice that lasts.
According to Dunbar’s work, we only have enough bandwidth to manage meaningful relationships with up to 150 people. And as thought leaders, experts and consultants, this is equally true with our clients.
Matt Church, founder of Thought Leaders, describes your 150s as the people that you would hang out with even if they weren’t your clients. These are people that you like, that you share values with and that you genuinely feel a reciprocal loyalty to. That is why they qualify as your 150 meaningful contacts.
When you have a genuine relationship with your clients, you are able to genuinely nurture them. You care about them and their success. So you reach out. You touch base. You follow up. You keep in touch. This is your culture of care – and just like it does with your personal friends, it builds loyalty in those relationships.
Peter, the Productivity Expert
Many of us may struggle to find our loyal 150s. It might not feel natural to take business relationships and expand them. You may feel that you’re overstepping an invisible boundary. Or you may not even know enough about your clients to know whether or not you like them or have shared values.
This was the case with one of my own clients, Peter. When Peter came to me he had nearly 7500 people on his list. As a productivity expert he was great at what he did, and fantastic at putting in the work and the systems to create this expansive list. But he wanted to grow his business. In fact, he wanted to grow it by 50% that year to $1.6m in revenue.
When he came to me the first thing I did was ask him to show me his top 150 customers – those who had bought from him in the past. But even though he’d been in business for 10 years, he wasn’t able to show me those top customers.
Once I pushed him he found 40 customers that had bought from him in the past and that he liked. So I asked him what he knew about those 40 people. Why he liked them? But it turned out he didn’t know. He didn’t really know anything about any of them apart from their roles and the work that he had helped them with. He also wasn’t connected in anyway – on LinkedIn or Facebook or through any other method. And he hadn’t taken any steps to keep in touch or maintain the relationship. He was too transactional.
Building Your Loyal Customer Base
When it comes to building your loyal customer base, you can learn from Peter. Spend time and energy on your top 150s. You want to show them that you genuinely care or they’re going to feel like just a transaction.
Taking this approach makes economic sense. Research shows that a returning customer will spend 67% more than new customers. And when Peter started to put processes in place around his 150s, he found that he was able to genuinely connect with them and come up with creative (and meaningful) ways to build that mutual loyalty.
He began treating them like friends, rather than transactions, and they responded. At the end of the day he was able to meet his goal of growing his business simply by treating his top customers as friends.
The key – as Peter shows – is to put in place the habits and the routines that allow you to build those relationships. Once you have those in place you’ll be in a good position to grow your own 150s.
Ways I Have Nurtured My 150s
Bought a table at a conference and took 10 clients
Organised dinners, lunches and breakfasts
Invited clients to concerts and retreats
Remembered and celebrated milestones, birthdays and major life events
Bought them a gift in my travels if I knew it was something they would like (a book, a scarf..
Sent flowers when they have been sick or when a family member or pet passed away. etc.)
Bought their new puppy a new toy
They don’t have to be big things, but you’re sending the message that they matter to you and you value the relationship.
Questions
Do you know your top 150 clients?
What do you know about them outside of work?
What processes, systems and habits have you put into place to build your relationships with your clients?
What creative ideas can you implement to be more inclusive and engaged?
I’d love to hear your thoughts….