This is part two in a blog series where I am exploring ways to help you deep dive your business, your team and yourself, to help you get inspired and reinvent.
In Part One, I explored some ways to look at your business to build some resiliency as we face more fear, uncertainty and doubt (FUD) about the coming year and how business as usual (BAU) is not going to cut anymore. One strategy I talked about, I’m going to unpack further here, today…
In other words, the 80/20 rule. If you look at the numbers, you will discover that 80% of your Revenue comes from 20% of your clients. Also, 80% of your Gross Margin probably comes from 20% of your clients. And 80% of your profit comes from 20% of your clients.
More particularly, I want to focus in on the clients that make up the Top 20% of you Revenue, Margin and Profit list (hopefully they are the same clients in each list).
Are you able to build a VERY detailed profile on those clients? Top police forces around the world have teams of ‘Profilers’ that build a complete-as possible make-up of their suspects. Great businesses do the same for their top clients.
The is no detail too small when you are analyzing who your top clients are.
The list goes on. Remember there is no detail too small.
And the big question that you must answer is “Why do they buy your product or service?” This is a massive question, because of all the companies that I have worked with, almost every one of them cannot answer that question the same way their clients do.
I will often ask executives why clients buy from them versus their competitors. I am not surprised anymore when I will get a whole collection of non-aligned answers.
I will then ask for a list of their Top 20% clients and go talk to them. Again, not surprisingly, the top clients are almost 100% aligned on why they buy from my client’s business and… it is very often not at all what the leaders of my client business think.
If you want more clients that look like your top 20% list, you must understand who they are and why they buy from you. When you have that knowledge, some magical things can happen!
Need more ideas? Reach out to me and we can talk about how to keep your business out of the dubious company of those that are no longer with us.