The Loyal Shopper Principle

Pareto’s Principle states that roughly 80% of effects come from 20% of the causes. In modern times, that’s been altered by many to mean 20% of the people do 80% of the work. A recent study by Concept Shopping, Inc. has found that the thoughts of old Vilfreto Pareto and his observations may extend to shopper loyalty.

A story in Progressive Grocer reports on an analysis of over 2 million grocery shoppers. The results are that 10% of the store customers visit the store over twice a week and are responsible for almost 40% of the store’s total sales. These customers spend over $39 on each visit.

Ninety-five percent of these loyal or “best” customers will continue to shop at the same store all year-round. Only 34 percent of a store’s “worst” shoppers, who visit less than once a week and spend only $9 per visit, will remain as customers. Only 11 percent of the dollars spent by the loyal group were on marked down items, meaning these customers not only provide volume, but also profit.

The message is simple. Loyal customers are hard to replace and new customers are hard to get. Promotion, pricing and advertising can bring new people to the store, but only a great customer experience can create the type of “best shopper” that, from these results, seem to be the life blood of retailers and brand marketers.