The Pareto principle, also known as the 80-20 rule states that 80% of your profits come from 20% of your customers. The question is, which 20% generate 80% of your business? Are you focusing on the right 20%?
It's a lot easier to make money with an existing customer who already purchased something from you rather than to do business with a so-called prospect, somebody who is interested in your products and services but has never taken that leap of faith to buy from you.
Here's the thing: Once a customer spends even a small amount, say 1 dollar, he is more willing to engage and buy a second time from you. But there is one critical condition marketers often neglect and that is: the products and services you are providing have to be outstanding. Customers are looking for great experiences and your job is to make sure you create and deliver excellence.
Who are those 20% of your customers that have the highest impact on your profits? What activities are generating your 80%?
First of all, you need to track the tasks and activities that generate the majority of your company's revenues and profits. The best way to keep a track record is to implement a system. If you don't want to blow your marketing budget on special CRM-programs, a simple Excel-sheet will do the job too. It's crucial to KNOW, not guess, what 20% of your activities and clients are generating 80% of your business profits.
The next step is to evaluate the results and calculate the value of each customer. Many companies focus entirely on market shares thus missing a critical marketing metric that has a powerful impact on their business. It's the so-called wallet share.
Higher wallet shares can be gained by increasing the average purchase amount, encouraging more frequent visits and improving customer loyalty and retention.
As soon as you have figured out who the most profit-generating clients are, refocus your energy, time and resources on this particular group.
There is nothing more important than your customers. If you want your business to thrive, be laser focused on customer loyalty. Have a customer-centric approach in everything you do, create and sell.
"The most important single thing is to focus obsessively on the customer. Our goal is to be earth's most customer-centric company." - Jeff Bezos, CEO & President of Amazon.com
With new technology and social media on the rise, word-of-mouth marketing remains the strongest form of marketing and customer advocacy.
Bottom Line: Are you ready to focus on the right 20% of your customers and increase your profits?
Then I invite you to check out Marketing Strategy Secrets for a first-hand experience on how to define your target audience and start marketing to them effectively. Look for the other 9 key ingredients for a proven marketing plan.
From Krisz Rokk and http://www.StrengthInBusiness.com/
Article Source: http://EzineArticles.com/?expert=Krisz_Rokk
Article Source: http://EzineArticles.com/8156948
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