In a previous article (see What’s your ideal Customer Profile?) we looked at the power of profiling your client base. Many businesses haven’t even got that far, since they don’t have a clear idea of who their best customers are.

The 80/20 rule or Pareto’s Principle can be applied to a lot of aspects of commerce. Often eighty percent of your company’s sales will come from twenty percent of your customers. Do you know who they are?

You need to indentify this rich stream, and spend more time on them, and less on the other eighty percent, because it’s often these poorer relations that will squeeze your resources.

As many who’ve attend a management training course or sales training course will attest, it’s the customers who bring in repeat business with a decent gross profit, and who are loyal, that cost you the least to look after, and they should be identified.

They are many different ways of calculating best customers, from simple comparison of total revenue divided by frequency of orders, to more sophisticated formula to work out a customer’s ‘lifetime value’

That’s why many businesses are investing in Customer Relationship Management (CRM) systems to identify, monitor and track their vast range of clients.

However, it’s not good enough to simply identify your best customers; you need to develop strategies to keep them as well.