The Pareto principle, named after an Italian economist, basically states that 80% of any given output is generated from 20% of the input. What does this mean for you and me? It means that your upper-echelon customers, or top 20%, are what really drive your business, and you need to pay attention to them and show them some special love.
1. Identify Them.
How are you going to define the best segment of your existing client base? In today’s modern business culture, there are metrics available to the savvy marketer, business manger, or analyst representing every possible scenario, activity, inactivity, or step along the customer life cycle.
Apply some basic logic and identify one or two metric formulas that make sense (RFM anyone?) to determine which clients qualify to be included in that top group based on the thresholds set forth by your organization. Just as important in identifying the best metrics is to create a ‘success metric’. For example, we will know our top 20% engagement plan is successful because X Metric will increase by Y volume or Z%.
Lastly, use a bit of common sense to identify a sub-segment of current clients that might not have the numbers to be included in this group today, but represent an incredibly large opportunity on the short-term horizon, which would move them into your top segment.
2. Allocate Resources to Your Plan
Because your top customers represent 80% of your business, either in revenue generated, units sold, etc.,take a second to think and put this into perspective. How many clients like this exist in the marketplace universe, and what impact would it have to your top and bottom lines if you lost one? How much would it cost you to find another one to replace that customer?
Work with your finance team and department analysts to put some real budget numbers against this. With the data to back up you up, you can make a business case to whomever you need to and allocate some legitimate high-caliber human resources into staying top of mind with your best customers.
A savvy operation will create a team (merchants, marketing, IT, etc…) that is solely dedicated to ensuring the engagement, support, satisfaction, and retention of this audience.
3. Communicate With Them.
Now that you’ve assembled some all-star employees, conducted a bit of research and analysis to create a segmented list of your best customers and accounts, it’s time to put the rubber on the road. Develop and build a comprehensive and strategic plan that is unique to your organization, vertical and industry, but be sure to communicate “with” them not “to” them. The power of this comes not from asking the questions, but from the actions you take once the responses have been provided and analyzed.
It is essential that you:
Find out if they’re happy. Conduct some surveys (online, paper, call) to find out with some level of certainty what your client’s overall mood, temperament and opinion is. Good or bad, the results will play a big role in shaping your communication with them going forward. Also find out what’s missing. What features, or services, or products do they need that you don’t currently have? What features does the competition offer that you don’t currently have or you do have, but needs improvement?
Ensure recognition at all levels: While the plan to ID and communicate with these customers is based on data and metrics, your customers are still human beings and everyone likes to be recognized and appreciated. Incorporate a universal symbol or data field so that every frontline, customer-facing employee recognizes these customers as your very best clients and provides them with white-glove service.
Ensure recognition at all levels (part II): This exclusive group of clients should be engaged well beyond the frontline employees especially by board members and the C-suite executives. Go the extra mile and send personalized holiday cards, individualized touch points (like birthday cards), event tickets and other forms of entertainment. Even a personalized email from someone at the VP level goes a long way.
4. Provide Unique/Exclusive Offerings
As your best clients this group is ripe for a range of special and unique services and offerings. This can run a wide gamut based on your industry and the nature of your client base. Some ideas include special discount pricing, invitations to exclusive sales and promotions, access to beta products or services before they’re released to the general public, access to key internal stakeholders like Product Managers, certain subject matter experts, etc…
Satisfying your top customers should never be a one-and-done endeavor. Stephen Covey’s “7th Habit of Highly Effective People” is to always sharpen the saw and to always strive for continuous improvement – be vigilant in your efforts to stay engaged with those people, departments and organizations that drive your business and positive results will follow.