Pareto’s Law states that an incredible 80% of your business will come from just 20% of your customers. These figures may sound extreme, but analyse your customer database for yourself and you may be surprised by the results.
Some of the names in the top 20% from your marketing database may be unexpected but these customers are the key to your business and should be a main focus of your Customer Loyalty or CRM programme.
Another key area of your customer database which may be overlooked is your customer retention rate. Whilst you may be successfully gaining new customers, how many are you losing without realising it? Slowing customer defections from a negative to a positive state is why loyalty and reward schemes were first launched in the highly competitive supermarket sector.
Take a look at a list of your active customers this year and compare it to previous years. Who is missing and why? Some customers will always be lost through natural wastage, but others may leave because they are dissatisfied with your business. Finding out why can help you identify other potentially high risk customers.
