Your top 20% of your “perfect customers” typically drive 80% of your revenues and profits.

So, if you want to leverage growth in your business, focus on finding more folks like your top 20%.

And, conversely…

If, you have the guts, follow the Jack Welch Theory of Client Management:

Fire your 20% least profitable clients.

These people are costing you money and time.

Money and time you need to spend on attracting more like your top 20%.

Simple. Not easy to do.

Walt

Ed

Look at iPod. We all know what it is, yet their marketing is only targeted to the Gen Y crowd. But that doesn’t stop people in other generations from buying them, does it? Everyone can, in theory, use an iPod, but apple choose to target the under 30 crowd. And are they hurting for business? NOPE!

Just a thought!

Ed

And yes while it may be intially difficult to get those questions answered, you need to focus on who your market is. If I had a dollar for every business owner who says their market is anyone and everyone, I’d be rich! Another way to zero in on your customers is to take a look at the data that you already have.

Look at sales records, talk to your customers, find out all you can about them. Track buying trends-is there a time of year/month/week that your sales spike. That might be a clue into buying trends, which you can then leverage to increase sales target new customers!

Also Ed, what I noticed with my business is that I had a core group of customers who purchased core product from me, it was those customers that I focused on not only to get new customers but to also make them so happy with me that they would come back and buy more all the time.

So if someone from that core group wanted a specific item, I worked my butt off to get that item in for them.

Of course I still gave great service to customers with other interest I just made sure I had what that core group needed as much as possible.

Ed

A new way of finding customers in the future might be to look to the social networks of your current customers. Have you heard of Google Social graph? Basically, it’s an initiative by Google to map out the social connections of the Web through collecting semantic data. That means, when I link from my blog to your blog as a “colleague”, people will see that connection. For marketers that look at these connections, they could reasonably determine that being colleagues, I’d be likely to be interested in the same sorts of products/services as you, otherwise, I’d be more likely to tell you about those services. I can’t really begin to describe the way it works, I guess you’ll need to see the example for yourself:

http://socialgraph-resources.googlecode.com/svn/trunk/samples/findcontacts.html