Marketing professionals call it the 80/20 rule — the law that says that, unavoidably, “80 percent of your business comes from 20 percent of your customers.”

But there’s more to that percentage than meets the eye. People who spend a lot of money with your business obviously require or desire your type of products and services. This also means they might be spending money with your competitors.

With a sensible and well-executed marketing plan, you can convince your best customers to give you an even greater share of their budgets. How? By using your records and files to understand your customers’ buying habits, you’ll begin to profile what your best customer looks like. I spent 12 years at a major catalog company that had a group of people whose sole job was to buy databases, or “best customer” prospects, from other businesses who had the same profile for their best customers.

Once you have a database of “like” customers, you can go out and create a mail or e-mail campaign to sell other customers who could use those services. There is a good chance they’ll become good customers, too. You might want to consider using a computer database for customer information (vs. your accounting software program). There are many off-the-shelf programs available that make it easy for you to analyze information and send personalized messages. ACT! is one such program.

Mining Methods
OK, now how does someone do it? Here are a few ideas:

  1. Give customers more of what they want — Go beyond the “Dear John Smith” salutation. Say you know John Smith’s preferred brand of cleaning supplies. You can send him a letter and a picture of the preferred brand when it comes in. Let him know that you’ve set aside a few cases of XYZ especially for him.

  2. Find new customers like your best customers — Are you doing a lot of business with certain types of organizations, such as schools that are within 25 miles of your warehouse? Rent a mailing list of other schools within 25 miles of your location and send them an offer. Lists are easy to rent, and cheap too.

  3. Do more of what you do best — What makes you any better or different than your closest or biggest competitors? The answer might be found in your database. If you sell certain supplies, you might discover that you get a lot of business from certain companies. Knowing this, you can rent a specialized mailing list of similar companies in your area and send them a mailing that features your services.

  4. Get feedback — Out of sight is out of mind in business, too. Write customers to ask how they enjoyed the products or services you provide. Simple letters will keep you top of mind.

  5. Beat competitors to the punch — A janitorial supply distributor can use its database to determine if it sells more supplies in late April than in May or June. With information like this, you can offer your best customers private sales at these times, before your competitors do. Oh, and don’t forget to add in a low-risk offer when you can, and always follow up with a phone call.

  6. See what works — Do you want to know what people are buying? What price are they willing to pay? Maybe you want to try selling a new item. Send private offers through the mail to your best customers. Try attaching a coupon for a low-risk offer or a special guide to some specific cleaning challenge. Then see how many customers use their coupons or request that free report. If something works, repeat it.

  7. Use customer feedback — Knowing your customers is just as important as knowing your product. Enter customer feedback into your database and see what you can learn. If you’re a service consultant, for instance, you might discover that many complaints are about one product. Knowing that, you can address a possible compatibility problem and advise customers effectively.

  8. Get more bang for your advertising buck — When a customer gets a letter or post card about sale items that specifically appeal to their tastes and needs, it has more impact for them. Remember, your customers appreciate the notice and will spend accordingly.

  9. Serve your customers better - Customers are more than happy to help you help them. Ask people what they want and what they need and put the information into a database. Then use the information to better serve your customers. You can make note of when certain customers buy certain products. You can even ask people if there are any special reasons why they did and keep track of them. Then, when that time approaches again, you can remind that customer.

  10. Let your customers know they matter — Use the database to find things that your customers want and need, and then contact them with the information. Anything from a private sale to a reminder that the product you sold them is due for a tune-up is good customer service.

  11. Reactivate inactive customers — If someone hasn’t done business with you in a while, send the person a discount coupon or a low-risk offer. It reminds them of your business and may help spark a renewed business relationship.

Glenn Fallavollita is a principal consultant with Y2Marketing and is president of MyMarketingPartner of Turnersville, N.J. He conducts workshops throughout the country to teach business owners and executives how they can differentiate themselves using Y2Marketing’s MYM System. He can be reached at (856) 401-9577 or email.




POSTED ON: 10/1/2004