Can you articulate the sexiest result or results that you get from your customer base? No — I am not talking about the fact that 98% pay their bills on time. (Yes, cash flow is indeed incredible. But that is not the sexiest result.) Let me give you a hint. There is not one but two sexy parts within your basket of customers that can really rocket your success.
The two absolute most orgasmic things about your customer base are:
• knowing where those clients rank within the entire base, and,
• knowing how much real profit each contributes.
Whaaat? I can see your shock that I am headed into the land of numbers and statistics. Hang tight. I am not going full-on analysis here.
Have you ever sorted the data you have on your customers from most to least? Yes, that is a serious question. As obvious as this simple exercise would appear, I wish I could give you the exact percentage of business leaders who do not do it. Trust me when I say more than 50% do NOT. Consequently, one of the most significant opportunities for growth and greatness is wasted. Let me explain.
With at least two years behind it, approximately 80% of its revenues come from just 20% of its total customers for every single company. In simple terms, if you have a business of say 1,000 customers, much of your overall business strength would depend on just 150 to 250 of them. The rest of your 750 to 850 customers contribute very little to your business. And the only way you can see this is to rank your revenues by customer — from the highest to lowest.
Let’s discuss the sexy part of this.
Do you (or your people) thank them, express gratitude or appreciation in unique ways or even find avenues to celebrate with any of those 250? Do you hold regular meetings with them to find out how their business is faring and whether there are opportunities for you to help them? (Say by connecting them to someone in your network, by offering to assist on a problem with them, or even by finding a new solution yourself for them).
Now, if you answered no, you are not alone. Many don’t do this. And to be clear, in my books, a lunch or a dinner with drinks does NOT fall into the appreciation/gratitude category.
I realize we all have our favourite customers. And those favourites are NOT generally based on the size of our revenue stream from them. Rather, they are rooted in the personal emotions and feelings we have about or towards them.
However, suppose you allowed logic to rule. You saw that list of the ranked top 20% of your customers by revenue. What different actions would you take that would pretty much guarantee a never-ending supply of revenue? I guess that while your marketing expenses might take a tiny leap upwards, your ROI on that tiny leap would increase by at least a factor of ten. That is sexy.
Stay logical with me for a short while longer. Conduct a different sort. Instead of revenue, use the customer profit contribution generated. Highest to lowest. Again, I promise you the 80/20 rule will come into play. And you will see somewhere between 150 to 250 customers generate about 80% of your profits. And please don’t be surprised if the pool of profit generators is slightly different from revenue generators’ collection. THAT is a widespread occurrence.
I call that new pool of customers you just sorted, The Gold Ones. Because they are your golden ticket to way more wealth, now, imagine what you would do to express gratitude and appreciation to that group. The Gold Ones who contribute the most to your bottom line. We both know the easiest way to the promised profit land is via your existing customers. We also know there is way less work and cost involved with existing customers than those who still don’t know us.
Here is the really sexy second part.
Lavish as much emotion and feeling as you can on those pure gold customers because your logical process of sorting them has provided you with real data! Let your mind expand to the possibilities. You have heard me wax poetic about being human. Start by treating those golden customers with respect, compassion, kindness and an open mind. Show them the human side in you, and they will beg you for a deeper connection, more openness and give you way more orders and lots more referrals. Mighty sexy, eh?
Want to chat about a process you might consider using to winkle out some sexy results from your customer base? Reach out.
