Annual Planning - Focus on Your Core Customer

By Patrick Thean

Not all customers are created equal.  Some are more equal than others.  We refer to these as our Core Customers.  Core Customers are the customers that you cannot live without.  They typically appreciate your service or products more, and your team enjoys servicing them more.  And to top it off, often times they are your most profitable customers.  Truly a Win-Win relationship. Unfortunately, for most companies, these core customers only make up 30% of their customer base. I always think of these customers as my "WHO".  The customers that I pursue, defend, and develop products and services for.  Some companies will even show me how 80% of their revenues come from 20% to 25% of their customer base.  

Question for you:  What would happen if you stopped servicing the 75% of your customer base that only delivered 25% of your revenues, and focused your energy entirely on winning more WHO customers?  What would happen to your cost of growing your business?  What would happen to the morale of your team?  So why don't you stop servicing these customers and focus on winning and retaining your WHO?

As you get together and work on your annual plan, consider spending some time in your Annual Planning session to work on your WHO.  First, discuss, debate and agree with your team on who your WHO is.  Make sure you describe the customer as a person, not as a market segment or a category.  Secondly, consider what would happen if you focused your top resources and people on growing these type of customers.  This transformation may not happen over night.  Ok, what about focusing on flipping the ratio.  Let's get your WHO to grow to 70% of your customer base instead of the 30% that it currently represents.

As you get together and plan for your next year,  here is a question for you to consider:  what would happen to your business if most of your customers are Core Customers?  Once you visualize such a wonderful future, then ask these questions to find your path:

  • How do we get to 70% core customers?
  • What should our marketing message and brand promise be to attract more core customers?
  • Why do we continue taking business from non-core customers?
  • How do we stop taking business from non-core customers?

I recently visited a client who showed me that 70% of their customers are Core Customers.  Their team is having a blast servicing them.  Here is a quote from their CEO "I could service 3 wonderful core customers for every non-core customer we service.  Why? Because the non-core customers do not appreciate our special services and our team members do not enjoy working with them.  We get really pumped working for the right customer"

You can do this.  Take the time to work on this during your Annual Planning session.       

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Patrick Thean


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