Most customer bases follow the Pareto Principle. 20% of your customers are likely to represent 80% of your revenue. 80% come either directly or through referrals and testimonials. Further, it’s likely that 20% of that 20% – i.e. 4% – will account for 80% of the 80% (or 64%).
It is useful to group your customers based on their current value to your organization. Label your top 4% as your Platinum customers, the next 16% as Gold. The Platinum and Gold clients account for most of your current business. The next 30% are Silver, followed by another 30% of Bronze. What will it take to convert your Silver and Bronze customers into Gold and Silver?
For more thoughts on this concept take a look at our Profile your best customers newsletter on that topic.