by Brian Bagnall
The widely-accepted belief in marketing is that 20 percent of your customers provide 80 percent of your revenue. Do a little digging and you’ll find that this generally holds true. But knowing that information is only half the battle. Some read that statistic and think, “Bingo! I only need to focus on that 20 percent.” Many more believe that they are already serving that 20 percent just-fine-thank-you-very-much and turn all of their effort to developing new business. The real value lies in understanding how to serve and cultivate different groups of clients. To that end, here are six simple rules for maximizing the 20/80 percent rule in marketing.
1. Know your top 20 percent. Many companies think they know who their top revenue producing customers are, often relying on the employees and sales staff to identify them. Not good enough. Invest in some marketing research. Comb through your receivables. Compile data. Create spreadsheets you can sort. Yes, it’s time consuming, but it’s also time well spent. And you may be surprised by the results.
2. Know where the top 20 percent is spending their money. The good news: your top customer brought in over a million dollars in product sales last year. The better news (from a marketing perspective): your top customer only brought in $100,000 in consulting last year. This is an opportunity! If your company is like most companies, cross-selling is still a dirty word. It’s time to change that. You have the advantage here. Your customer knows and trusts you. What’s more, you know the customer and the issues that are keeping him or her up at night. (If you don’t know this, it’s time to ask.) You don’t need to engage in a hard sell, but it would be a good idea to introduce some of your colleagues who can bring value to the customer. Even better, brainstorm ahead of time to come up with solutions to issues your customer didn’t even realize he or she had. Just remember, keep is about the customer, not your company.
3. Keep that 20 percent happy. Don’t get complacent and just send bills. Drop a note or e-mail if you see a relevant article. Send a gift thanking the customer for his or her business. Support a charity that is near and dear to the customer. And be candid. Ask every once in a while if the customer is happy or if there is more you could be doing to help his or her business.
4. Groom tomorrow’s 20 percent. Back to the other 80 percent of your customers. Don’t ignore this group. While they may not be bringing in the big bucks, some of your most ardent supporters can be found here. They usually know they are the bread and not the butter of your business, so they are even more appreciative of professional, personalized service. For example, while you can’t send a holiday gift to all of your clients, you can send a card. And since they will generally have less face time with you than larger clients, make the most of it, giving them your undivided attention and really listening to their needs. That way, when they do have more business to bring, they’ll think of you first. And remember, these people have friends, which brings us to…
5. Ask for referrals. A referral from a happy customer is worth more than all the advertising, sponsorships, speaking engagements and PR combined. It is perfectly appropriate to tell a client that your company is always looking for quality clients and believes the highest quality referrals come from current, valued clients. They’ll be flattered that you asked.
6. Cut out the deadwood. Speaking of quality clients, I’m sure you have some who aren’t. Identify them and stop putting any energy there. “Fire” them if you have to. See, now you just made more time to cultivate the rest!