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Narrow the sample to those who are already your top priority customers. You’d like more of them, wouldn’t you? Then you need to learn more about them and what makes them tick. Find out what appeals to THEM. Use what they tell you to tell others why they are happy with you. Like attracts like. If you’re losing top priority customers or they are unhappy with you, find out why. You’ll want to drill down to the people making the decision to purchase, the people who will use the offering, and those who will influence purchase and use. We’ve seen situations where the people using the product loved it, but they didn’t have to deal with burdensome details their counterparts in contract administration had to contend with. Guess who will push the next purchase to a competitor who makes their job easier, assuming product performance is equal? If you have a CRM (Customer Relationship Management) system in place, you have a head start—on creating the lists as well as the rich profiles of the people you need. You may have database queries, OLAP (On-Line Analytical Processing) software, neural networks, predictive modeling, cross tabulation analysis, and other analytical techniques to help you segment top priority customers and to find other potentially top priority customers within your customer base and in the marketplace in general. Top priority means different things for each company. It could be those who make large purchases or regular purchases, those who pay quickly, prestigious customers whom others will copy, key customers in a new industry or geographic location. Or it could simply be those who are the most profitable. We say “simply those who are the most profitable,” but we know it is not so simple to identify them. High-revenue customers are not necessarily the most profitable ones, although revenue has been a proxy for profit in a number of companies. High-revenue customers can eat up a lot of resources without commensurate benefit to your company—in terms of discounts, special requirements, extra service, etc. We can help you approach profitability segmentation from many perspectives, at many levels of sophistication. To get started thinking about customer profitability, see the reference section entitled HOW to Focus on Profitability. |
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