We are now in a time known as the “Age of the Customers,” meaning that the customer is king and queen now more than ever. Being successful in your business means being able to clearly identify and satisfy your target customers.
Internal Customers
When you are looking at your customers, the first step is to identify your internal and external customers. Your internal customers are those whose success is reliant upon you and you rely on them for your success as well. These people include your staff, your professional advisors such as accountants and attorneys, and/or your colleagues. Anyone who is a part of your business and helps it in any way is a customer.
External Customers
Your external customers are those who use the product or service you offer. Being able to clearly identify your customers is important in determining the success of your business and is an integral part of each strategic planning element.
Ask (and Answer) The Right Questions
What does the customer value most? What benefits do they receive by using your products and services? What do they need to be completely satisfied? How do your products improve or make a difference in their life or work?
If the current business trends continue, who will your future customers be? If you decided to make changes to your offerings, who would your customer be? Who is the right customer for you when you want to rise above the competition? What can you do to improve your skills and knowledge to be able to satisfy that customer?
Looking at your current customer base, are there those who you would choose not to do business with again, knowing what you know now? The way to find your answer to this
question is to divide your customers up into high-value and low-value categories. What are the qualities of your best customers? What sets them apart from your other customers?
Taking time to identify your high-value customers means that you can focus more of your effort on those customers who do more for your business, and also to seek out more of the customers who are like them. You can spend less time on low-value customers, perhaps even encouraging them to do business elsewhere.
Apply the Pareto Principle
There is a rule that entrepreneurs can apply to their customer base called the 80/20 Rule. When you divide up your high and low-value customers, you may see that the smaller percentage of your customer base, the high-value customer, may help to generate the largest portion of your revenue, while a large portion of your customers who fall into the low-value category only bring in a small portion for your revenue.
With this insight, you can focus more on your high-value customers, work to bring in more customers just like them, and hand your less valuable customers off to other companies who can better serve them. This strategy could help increase your business revenues greatly without working twice as hard for low-value customers.