We all know that the top 20% of customers represent more than 50% of revenue and a greater share of margin. We know that those customers purchase year around and less on clearance than cherry-picking customers. We also know that these customers buy deeper into our product assortment, balancing revenue and distribution.
So why do companies persist in focusing on acquisition of promotionally sensitive customers, particularly in a tough economy? See my post below, and thanks to Wayne Smallman of the UK for his insightful comments:
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{ 1 comment… read it below or add one }
Mark, hi! The point you make about customers that are drawn in by offers (and then leaving, to go in search of another offer) is a really good point, relevant to all kinds of business once you think about it.
I deal with a relatively small number of projects that are often in the low thousands, so offering deals / discounts isn’t the way forward for me.
Instead, the added value aspect only becomes accessible once the relationship opens up over time (typically the first year onwards). So it’s a long-term game for me.
Mark, thanks for the kind mention.
Speak soon…