Business Success Tip: Know Your Customer
A second question posed regarding clarity in your business was this:
Who is your customer?
You have two categories of customer – internal and external. An internal customer is anyone who depends on you for his or her success and anyone upon whom you depend for your success. Using this definition, your colleagues and your staff and perhaps your professional advisors such as lawyers and accountants are your internal customers. Everyone around you whom you help, or who helps you, is a customer in some way.
Who is your external customer, the customer who uses what you produce?
This is the key area of business success. Your ability to accurately identify the external customer whose satisfaction determines your success of your business is critical to every element of strategic planning. What does your customer consider value? What specific benefits does your customer get from using your products or services? What does your customer really want and need from you in order to be completely satisfied? How does your product change or improve his or her life and work?
The twenty-first century is being referred to as the ‘Age of the Customer’. The customer is king or queen as never before. Your ability to identify and satisfy your key customers is a critical determinant of your success and your rewards in life.
Who will your customer be in the future, if current trends continue? Who could your customer be if you were to change your product or service offerings? Who should be your customer if you want to rise to the top of your field? How could you upgrade your knowledge, your skills and your ability to satisfy that customer? Are there any customers in your business, who, knowing what you now know, you wouldn’t start working with again today – i.e. those who should not be your customers?
Many companies today are analysing and identifying the qualities and characteristics of their very best customers. They are then sorting their customers into high-value and low-value customer segments. By doing this, they can focus more and more of their time and attention on their highest-value customers, and on acquiring more customers like them.
Simultaneously, they spend less and less time on their lower-value customers and, in many cases, encourage their lower-value customers to do business with other companies. A successful entrepreneur we know recently applied the 80/20 Rule to his customer base. Not surprisingly, he determined that 20 percent of his customers contributed 80 percent of his sales volume and 80 percent of his profits. He decided to ‘fire’ the 80 percent of his customers that contributed 20 percent or less of his revenue. One by one, he handed them off to other companies in his industry that he felt could service them better. He then focused all of his attention on his higher-value customers. Within one year, his business and his personal income doubled. Would this strategy work for you?
Then, act on your new insights. Your life will change in ways that may surprise you.
The purpose of this blog post is to help focus your attention on those areas of your life upon which we will work during our time together. This act of observing – focusing upon – these critical life elements ensures maximum return on your investment of time and energy.
What one action will you commit to take as a result of this blog post?
How will you follow through on this commitment?
If so, what benefit(s) do you intend to realize as a result of this action?
If you do not follow through, what consequences will you encounter and what will that ultimately land up costing you?
When will you complete this action?
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