Have you heard of the Pareto Principle? Named after Italian economist Vilfredo Pareto, it’s also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity. It’s the idea that 80% of the effects come from 20% of the causes.
In business, it’s the origin of the idea that 80% of your sales come from 20% of your clients.
That 80% of your time should be spent developing the top 20% of your staff, because they’re the ones who will actually generate majority of your business’ success, sustainability and growth. That 80% of your marketing should be spent on the top 20% of your customers – because 20% of your customers are responsible for 80% of your repeat business, add on sales, referrals and other good things that ideal customers do for your business.
The 80-20 idea abounds in business! But what if you could have more.
What if the ratio of returning, higher ticket purchasing and referring customers in your business were 30%, 40% or even more? You can get there, but you’re going to need to get greedy when it comes to your customers, especially your ideal customers and ideal client types.
You’ll need to be greedy when it comes to gleaning information about what makes your most ideal customers tick, and then put that to use to build buyer profiles. And once you have defined some of the traits shared by your best customers, you’re going to need to get greedy about finding more just like them.
Think about your best customers. What traits do they share? There could be all kinds of commonalities that will help you attract more of your ideal client types; such as:
- Geography. Do your best and most engaged customers all come from one or two neighborhoods? Plan a marketing campaign targeted to the zip codes, areas of town or even the unique neighborhoods where your best customers live.
- Employment. Do your best, most engaged and loyal customers work for certain employers or in certain types of jobs? Plan a marketing campaign targeted for outreach to those employers or those types of employers. Create special offers for the employees of large companies in your area, for teachers, health care workers, emergency responders and other niche or industry groups that tend to produce more referrals.
- Hobbies or interests. Do all your best customers love wine tasting? Skiing? Comedy clubs? Cooking? Hiking? Crafts? Games? Create incentives for purchase that connect them with their interests or hold events that bring the two together in some way.
- Passions. Do they support fundraisers for the same schools? Give to the same charities? Race for the same cures? Find out what types of causes and charities motivate your best customers to action and make your own involvement in the community, charitable organizations or other interests of the heart known within your community.
Every customer interaction provides you with opportunities to get to know at least one more piece of information about what is important to your best customers. And you can use this information to build buyer profiles that will better help you serve existing customers and get you more customers just like them.
Don’t be satisfied with 20%: Get greedy, and get more ideal customers! .