Best Customer, Your Products
This morning I opened my email to see this post from Seth Godin on the Circles of Marketing. My immediate impression was how it looked just like our solar planetary system with all the different types of best customers and fans nearest in orbit to the product (sun) and those with the least interest and fewest purchases (as far as we know) out circling with Pluto far away.

What it doesn’t show you in the illustration are how much products are being bought by your closest and biggest fans. But for most businesses, upon careful examination they usually find that 80% of their business comes from the top 20% of their customers.

In Seth’s post, he relays that most people think most marketing (or advertising) are targeted to that outermost orbit, which seems a bit silly if only 20% of your business comes from the occasional buyer, right? But wouldn’t it make much better business sense to devote 80% of your marketing efforts to the group making 80% of the purchases?

What if you got it down to 10% of your customers buying 90% of your products by refocusing your efforts? After all, your biggest customers and fans are already sold, per se. They’ve already jumped the hurdle to like you, then trust you and consider you an expert from which to buy. It’s a slam dunk!

Why We Don’t Always Make the Obvious Strategy Choice

The obvious decision is to shift your marketing strategy to focus on getting your top 20% to buy more stuff. They’ve already proven they’re big fans. But for mysterious reasons many businesses don’t make this shift. Why?

Hypothetically, pretend you own a book shop with a niche specialty of writers and topics you carry. This line of products has brought you steady, book-loving customers nearing retirement age. Sure, you get a few younger buyers, but they are the exception and not the rule.

Just to make sure you don’t miss some of those younger buyers you post Status Updates to your Facebook page every week or two. Once a quarter you send out a newsletter about upcoming releases to draw in repeat traffic. Occasional ‘Meet the Author’ events do extremely well for you, bringing out your favorite repeat customers and produce a rush of sales.

You’ve crunched your numbers and have observed that the older buyers make far more purchases in larger dollar amounts – by a long shot – and yet you continue posting to Facebook and advertising in mediums heavily trafficked by younger folks who rarely shop in your store.

“I didn’t want anyone to think I’d gone under,” is one excuse I heard for continuing with a venue that didn’t drive traffic to your shop.

Here’s another: “I don’t want to stop just in case the new perfect client happens to see me there!”

Or even: “I’ve been with

[that publication/social media site] for so long! I couldn’t possibly drop it!”

Really?

We’re good at making excuses for not making changes in our businesses and in our lives. Perhaps it’s easier and safer to think, “Well it worked once (maybe long ago). Maybe it will work again!” Or, “I know what kind of results to expect, so it’s safe.” (And if those results are consistently low, you’ve done a good job of telling yourself bare bones results are ‘good enough’! Hmmm.) Or, “It’s not safe to put all my eggs in one basket. That’s why I use multiple mediums.”

The question is: How well are you using each of those mediums?

Obtaining Great Results, Time after Time

Going back to Seth’s Circles of Marketingand my own mind-play association with our planetary system, here’s how to ramp up your results:

  1. Determine EXACTLY who your top 10 to 20 customers are that produce 80% of your sales.
  2. Study their demographics and psychographics (the way they think) to determine what you can help them with and where they’ll see your advertising and marketing efforts.
  3. Focus 80% of your marketing and advertising efforts on your top customers already purchasing 80% of your products.
  4. Spend no more the 20% of your overall marketing budget and time on the folks only purchasing 20% of your products.

Using this method should attract more and more raving fan customers to your business. You should see a nice uptick in your average sale amount per customer. Most importantly for your business to last, you should also see an increase in the Customer Lifetime Value as you continue to offer more and more items that directly appeal to this perfect customer.

Seth’s right. Focus on an inner orbit of customers for best results.