Small & medium business

Who are your "20% customers"?

Girl doing cartwheels

20% of your customers probably give you 80% of your revenue - so find out who they are, fast.

If you have a wide range of customers, you'll probably find that 20% of them provide 80% of your revenues. This old principle - the 80/20 rule - may not be rooted in much concrete science, but it certainly tends to be true for many businesses.

This means that you will have a small group of customers providing a disproportionately high part of your revenue - and that means it's vital to identify and target those customers with a significant part of your marketing funds.

You might be thinking that this makes no sense - after all, it's the rest of the customer base that has more potential for growth. But keeping your biggest customers on board is vital: lose one or two of them, and a very large chunk of your revenue can disappear.

So the key element is to look at your customers, work out who that important 20% are - and spend money accordingly.

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