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Customer Loyalty Myths
The 80/20 Rule Isn’t Always Right
Years ago, Harvard researchers noticed that about 20% of customers are profitable, while the remaining 80% were a combination of unprofitable and break-even customers. As a result of this research, businesses began focusing on their top 20% spending customers. However, concentrating on just those customers may be chasing the wrong rabbit down the wrong hole.
Customers who spend the most money with your company aren’t always the most profitable. The problem is many top-spending customers only buy on deal or demand so much service that they spend more in staff time than they spend in product purchases. But those numbers can get lost when customers spend so much.
Uncovering these unprofitable customers can be key to your company’s bottom line.
To find out how to keep track of your profitable customers and learn how you can turn unprofitable customers into profitable ones, contact O’NEIL Data Systems. Phone 866–659–0824 or sales@oneildata.com.
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