By Josh Sommers
Published 04/23/10
Most often, 80 percent of a company’s business can be attributed to 20 percent of its customers. OK, that’s no big revelation. But when developing strategies to grow your business, it’s vital to market with the 80/20 rule in mind.
Going after new business through advertising is important. But the lowest-lying fruit in growing revenue rests in your database. For most industries, it’s a company’s biggest asset. Are you frequently communicating with your top 20 percent customer group to get them more engaged with your products and services?
Let them know all that you do
Direct mail, e-mail blasts, educational seminars and newsletters are excellent vehicles to strengthen your customers’ awareness of your company and to cross-sell your offerings. As an example, a top customer receiving retirement planning services could also be a lucrative insurance client. A very common mistake made by businesspeople is the assumption that their customers know “they do that, too.”
Wrong. Consumers are unengaged, and without a consistent strategy to up-sell your top clients, you’re missing out on a huge opportunity.
Don’t forget the personal touch
Rewarding your top customers is also a common and effective tactic. Major retail chains, like Best Buy, Staples and Toys R Us, offer rewards programs. There are hierarchies to the programs that naturally incentivize their best customers. The more you spend, the more points you earn that can be redeemed for store dollars and other rewards. Particularly in the retail world, these types of programs build customer loyalty and drive more trips to the store. It’s not just mega-chains offering these rewards programs. You can find variations at many locally owned restaurants and retailers.
The most important strategy in doing more business with your top customers is the personal touch. Big companies like Wal-Mart try to do that with greeters, but for those who own or help run a small business, building strong relationships presents the biggest opportunity for growth. Touch your clients and top customers often. Hold an event for them or do one-on-one meetings to see what else you can do to provide better service. Yankees tickets never hurt (though they’re obviously not practical for all situations).
It’s not rocket science. The top 20 percent of your customers are your bread and butter. Find additional ways you may be able to do more together. There’s money to be made.
Josh Sommers is president and CEO of Focus Media, a leading Hudson Valley advertising and public relations agency. He can be reached at josh@advertisingandpr.com or 294-3342, ext. 303. Read his blog at www.advertisingandpr.com. His column appears Fridays.
