I’ve come to the conclusion that it is only 20% of your customers that deliver 80% of your profits. The million dollar question is how do you recognise and target more of the most profitable ones that can bring you more business by word of mouth?
Firstly it’s worth making sure you have a way of identifying customers at each touch point with your organisation, something I know that the business banks are so bad at. I reckon that the bigger the company the harder this task becomes. We recently changed offices and informed our bank and yet continue to get mail directed to our old office address despite repeated requests to update their records. This clearly illustrates to me that our bank has no consistent approach to customer communications and each department works in a silo.
I’m sure many of these banks have spent millions on CRM (Customer Relationship Management) systems and yet the culture and structure of the organisation is to put staff in departments that compete for business and do not work together to serve the customer and have no way of recognising the customer at each touch point. How many times have you called your bank, been passed from department to department then asked to answer the same security questions until you are blue in the face…. sound familiar??
I believe there are a few simple ways of measuring the degree to which a customer is willing to be an advocate for your business. This can be done very easily by asking them if they would recommend your company or service to others. The higher the percentage that say yes, the more likely they are to buy again. I’m surprised how rarely I get asked if I would recommend a company’s service and yet companies trading on Ebay live or die by the level of positive feedback they get from their customers. I’m sure here we have a little insight into the online, transparent future of business and who the winners and losers might be.
You can also gain valuable insights by asking customers a few key questions whenever they contact you. Instead of simply posting an email address on your site for enquiries, why not treat any email as a way to start a conversation. We ask them how they found out about us, to rate our site and sign up for our newsletter. This has given us insights into who our best customer advocates are and sometimes we are surprised by the insights we gain. We find out where are marketing money is working best. We also learn a bit more about our customers from our online and offline conversations and post travel survey and this helps us to build up a profile by postcode, media usage, family group, and future travel intentions, which we can then use to target the most profitable ones more easily.