I talk a lot about analyzing your business, to determine who amongst your clientele is supporting you in style, who is an anchor around your neck. Figure out how to get more of the former, less of the latter.
Who’s in the ‘A’ group? Where did they come from? How were they developed?
These questions’ answers lead to better external marketing.
Re-assessing which customers you spend money on, craft offers for, reward, recognize and nurture improves internal marketing and bottom-line profits.
One of my Wealth Group Members went home after a meeting once and did the painstaking, time-consuming analysis – and discovered that 97% of their profits come from the top 50% of their customers, only 3% comes from the bottom 50%.
The response is regrettably not as simple as just shooting everybody in the bottom half of the class. Presumably there is movement from bottom 50% to top 50%, and now that must be found, figured out, analyzed. What predicts those who move up vs. those who never move up? But clearly, it is a shocking and potentially valuable piece of information.
Gold/VIP Member John Davis has done and does a lot of work on this, and uses the information intelligently in both internal and external marketing. I know certain things as fact about my customer value based on source, and have used that over the years in relationship to both internal and external marketing. And some of what I do you may or may not ever be aware of, depending on what segment of the group you are in.
We laugh at – and should fear – the ignorance of the vast majority of people. If you ask a retired senior where his Social Security and Medicare comes from, you have about a 1-3 shot of getting “from the government” as an answer, and another 1-3 shot of “from all the money I paid in.” 2 out of 3 are wrong and ignorant.
Ask workers where their paychecks come from; the odds of hearing “from the customers who buy our products” is about 80-1. No, most people are clueless about where their money comes from.
And that should not be shocking. There is no required course in high school or college that spells out where money comes from. Most parents can’t teach it because they don’t know themselves.
But what is more shocking is how many business owners do not know where their money comes from!