Call it what you will - “The law of the vital few” or simply the “80-20 rule” - the early 19th Century principle devised by Italian Vilfredo Pareto when applied to the world of business provides a clear rule to take note of. That is: 80% of a business’ revenue comes from 20% of its customers.
So what about the other 80% of your customers? Should you ignore them?
No, that would be bad business. However what you can do is make sure that these remaining 80% don’t drain valuable resources that could be focused on the more profitable 20% of your customers. This in itself poses another challenge – how do you identify the 20% of your customer base that is the most profitable? This is where Blue Sheep’s Money Mapping modelling tool can have a revolutionary impact on your business.
The Money Mapping modelling tool allows an organisation to identify how they can generate more sales and more profits from fewer customers.
For too long the focus has been on using technology to grab a market share that simply maximises the number of paying customers. With Money Mapping, we can identify where the most valuable 20% of customers lie; it can free you from devoting too much attention to the 80% that are high maintenance, but low value.
Money Mapping enables the focus to be on customers that spend more, stay longer and that recommend your business to friends and family – the aim being to build long lasting relationships with these most valuable customers. Not only are these customers more lucrative, but also they tend to be less demanding and more loyal. In short, these customers should form the bedrock of any future direct marketing campaigns.
Changing World of Marketing
So if your customer base is into the thousands, how do you go about focusing on these precious 20%? It is without question that marketing is in a constant state of flux with new theories and concepts being touted as the ‘next big thing for customer success’. But if the Pareto Principle proves anything, it’s that there are only a few true concepts that can stand the test of time. One modern concept that has taken hold is that of the Single Customer View (SCV) that enables marketers to personalise their content at an individual level.
The use of data in achieving a SCV is crucial in order to provide your business with a trustworthy foundation for analytics. As a provider of data services that are proven to deliver actionable insight, we know it is possible to achieve this goal and deliver marketing campaigns that allow businesses to engage in true 1-2-1 marketing across all marketing channels.
Click here to find out more about Money Mapping, or if you are interested in learning more about Single Customer Views then click here. Alternatively if you have a specific requirement then please email firstname.lastname@example.org or call us 01242 545340 to speak to a consultant.