Monday, June 6, 2011

Choosing the right customers.

Just as you need to choose the right employees for your business, you need to choose the right customers. If you have heard of Pareto’s principle then your familiar with the rule that 20% of your customers provide 80% of your business. What businesses need to ask themselves is -- how can they provide that 20% of people the best experience. This is not an easy question to answer, but on discovering it businesses will be able to fully develop their culture and ambiance to attract these longer term customers.

When a potential customer comes in and buys something it means nothing to have them buy something once, a business thrives off of repeat customers. Businesses should look to achieve a high customer conversion rate, a good place to start is by looking at successful competitors. What do they do? What can you improve on? 

I have some personal opinions on achieving a high customer conversion rate and I would one day like to experiment with it through using social norms. Conventional methods (and they do work) will tell you reward programs (free coffee, airmiles etc..) are one of the most effective tools in converting people into long-term customers, unfortunately with so many companies offering rewards – companies need to discover new means of converting customers.

What customers are best for your business?