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Do 'one-time customers' exist?
I work in the travel industry. For the past 5-10 years, the company I work for has always said that our customers buy from us once, never to return again. I'd like to challenge whether that mindset is valid.
Considering that our current customers now share their travel experiences with friends on Facebook, Twitter, Yelp, TripAdvisor, and in turn convert prospects into actual customers, do "one-time" customers exist anymore? Or does this idea only apply to the travel industry?
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13 Answers
Roger - great question. Before I read your detailed comments my first reaction was to think about the travel industry - where someone might visit a store only once in their life in Paris or Aruba or wherever.
But your point is well taken about the value of that "one-time" customer. Because of social media and UGC, we've entered the era of what I call "Sideways Marketing" - where rather than just push and pull marketing, customers market to other customers who then find your business.
So while some customers may have a high lifetime value other customers (or even prospects) who have a low or no monetary LCV, might actually have a very high CRV - Customer Referral Value. So as you say, perhaps they stay at your hotel in Maui one time, but have a bad experience and go on a mission on every travel site to let the world know your hotel sucks.
Or the contrary, they have a great experience, but also happen to have a lot of followers on Facebook and Twitter and their friends often seek them out as experts on travel questions. This one-time only customer might over time be responsible for dozens of new customers, many of whom are then responsible for dozens more....
I guess way back about two years ago we called this word of mouth...
So I think you are correct in challenging the mindset at your company - as every customer, whatever their lifetime monetary value, could have significant positive or negative impact on revenue because of their influence and word of mouth.
I agree with what many of you have said so far. One-time customers should never exist in an ideal world. Every customer should either be so happy with your product or service that they come back again, or they let others know about their positive experience. If you approach customers with the mindset they won't return then they probably won't. If you approach every customer with the mindset that they could become loyal customers, then the possibility is much higher.
If you leave a good impression of service, they are bound to come back. Although they paid for the service, they are really buying you. The expense means nothing to some as long as they are properly served. God bless.
One-time customers most certainly exist in the funeral business.
Seriously, though...
To Lauren's point, customer experiences no longer occur in a vacuum, and customer referrals - or detractions - can be a click away.
Given the boundless connectivity that exists today through digital "relationships," increasing travel and greater transparency, that one-time customer who may never have occasion to be back himself has an exponentially greater affect on the likelihood of other customers buying for their first time.
So, back to Lauren's point, this new connectivity should cause us to want to consider each customer's Referral Value, in addition to their Lifetime Value.
Because...
While a customer may only buy from you once, if you make that one time a positive experience, that customer may sell for you for a lifetime.
Jim Watson
http://bit.ly/rmOYIf
Roger, I think the company you work for created a self-fulfilling prophecy. In my “travels”, I have found that a certain percentage of the population travels frequency, some only for special reasons and some, none at all. But, I can guarantee that if a first time customer’s business was valued and appreciated that they would be open to suggestions from the travel agency for future trips that they might enjoy. Travel agencies could even partner with banks to start travel saving plans, collaborate with affinity groups, etc to start the customer on the journal of a lifetime of loyalty.
There probably are industries that have one-and-done customers...like a funeral home, maybe. But, travel? That seems odd to position it as one shot offering to customers.
Something I have been thinking about for awhile is whether from a customer service perspective we are moving towards a situation where the 'single resolution' (or attempt at a first time resolution) becomes of greater importance than actually thinking about a customer's entire life history.
If through something like Twitter we are seeing a customer's issue being dealt with in one go end to end, then to what degree is the customer's history important? HOw much do we then really need to know or undertand about our customer? In a sense, every customer becomes a 'one-time customer' each and every time.
I'm still thinking it through, so my answer may not sound particularly well thought through!
The customer of the funeral home is not the person who is buried but the person responsible for getting them buried. Sadly, with multiple deaths in my family I have been a repeat customer of a funeral home. The 'referral value' mentioned above would also be applicable to a funeral home's services.
But I can think of one kind of customer who is a 'one time customer' and that is one who is dissatisfied with your product or service and who has a choice next time they need what your organization provides. If your attempts (or lack of attempts) to resolve issues failed, you may have a 'one time customer.
One time customers exist in every industry. Since you are in the travel industry I will address this industry. There are numerous websites that you can book travel on and customers will seek out the cheapest price when booking online, because product differentiation is minimal for online travel.
I just booked a flight for Thanksgiving on a site that I have never used before, because their price was a little cheaper than a site I normally use. There is a chance that I never come back to that site, because the site only had one competitive advantage, the price of that specific flight was marginally cheaper. Next time I search for a flight, that might not be the case. There are even popular sites such as www.kayak.com, that will bundle search results for a bunch of travel sites.
The key is providing a service that will differentiate yourself from the competition, so that customers will be willing to use your service even if another site will offer a cheaper price. Give them a reason to come back.
Also, never forget the 80/20 rule. Eighty percent of your revenue comes from 20% of your customers. The other 80% of customers will only provide 20% of your revenue. A lot of those customers are one time customers. A key to increasing revenue is turning those customers into the 20% that generate the majority of your revenue.
Roger, in industries where customers are repeat buyers of a product or service, "one-time" buyers are created by the sales organization. All buyers that make multiple purchases of the same product or service, excluding bottom-price buyers, prefer to make their purchases from a trusted source that provides good service at a fair price for the value.
Create an incredible customer experience pre and post-sale by being honest, forthright, courteous, empathetic, responsible, and accountable.
Deliver and fulfill as promised.
Treat your customers better during the post-sale process than during the sale; e.g., service, support, and billing.
Stand behind your products and services. When something goes wrong make it right. You cannot buy that type of PR. But fail and you cannot pay to fix your reputation.
If you have one-time customers in a business space of buyers that continue purchasing your products and services from other sources, you're company is doing something wrong. It sounds to like your organization's vision is skewed by misconceptions.
Forgive me. I'm not going to deal with the funeral home or the travel agency, but rather want simply to offer what I think is a great definition of a customer:
A customer is someone who buys X-dollars of Y-products over Z-duration.
Then again, I do believe in the 20/200 Rule: 20 % of your customers bring in 200% of your profits. best, ngp
Well one theory of thought.. A customer themselves perhaps may never again physically give you money, but their words and opinions are railway systems affecting and influencing others who may would of never used your business before(no matter the medium). One customer brought another customer who perhaps may have never used you before, so with that being said is that truly one customer? or rather one "group" of income generating from one customer.
I have to disagree with most of the other comments. One-time customers absolutely exist, and there's nothing wrong with it.
The vast majority of our customers are repeat buyers and we are fiercely proud and protective of our customer service reputation and track record. But there are times in many businesses when an individual or a company only needs "one shot" of what you have to sell. It's no reflection whatsoever on your product, service or ability to retain customers. We have had corporate buyers place huge one-time orders with us for specific events or other needs, and they've been absolutely delighted, but we both know going in that they probably wouldn't need to buy again.
One time sales are bad only if they are the result of dissatisfaction. But if they are going to be one-time sales no matter what, the wise thing to do is look at those sales as "bonus" or non-recurrimg business (even if the customer might still come back later), be happy to get them.
But above all, notate and remember these orders the following year and adjust your year-on-year plans and budgets accordingly. The worst thing you can do is either forget they happened or irrationally hope you'll match them again the following year, and bank on that "plus business." If you got a 10% spike last month due to a non-recurring order, you should assume (unless you have a good reason not to) that that 10% spike is not going to happen again next year in the ordinary course of business.
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