Posted on: Monday, August 27, 2001

60 Seconds on Business
Gain a bigger share from rival vendors

By Dr. Drake Beil
President, Solutions Inc.

"A" customers give you most of their business, and you need to keep them and keep them happy. I mentioned several ways to do that in previous columns. Now, your second target group are the "B" customers who give you a good chunk of their money, maybe 40 to 80 percent of their business. But they're using other suppliers or vendors, and more of your business can be stolen away if you're not careful. This "B" group of customers could buy more from you, but they don't. Why not? What would it take to get more of their business and turn them into "A" customers? You'd better find out.

You can do focus groups or surveys to discover what it would take, and then do some process redesign to make it happen. To budget for the costs in generating new business, start by realizing that converting a certain number of these "B" customers to "A" customers is an important way to increase value for your company. They're really the easiest to succeed with because they already like you. Low-hanging fruit is what they are. You can even determine how much to invest in your marketing efforts by calculating what moving a "B" level to an "A" level is worth to you annually, and then applying a percentage of that to a marketing budget that includes ongoing customer focus groups and special targeted marketing and sales programs.

A third group of customers for you to consider is what I call the "C" team. They give you less than half of their business, and they're giving your competitors most of their money. To develop a plan to increase these customers' value, first find out what their providers are doing that they like, and make sure you do it as well or better. The "C" group might give you more business, if you could find out what they're not happy with and then focus your marketing and service efforts at filling the gap between what they're not getting and what they really want. Figure out what's it worth to move a "C" customer to a "B" or "C" to an "A" status, and then commit to an improvement program that sets goals and will more than pay for itself.

Reach Dr. Drake Beil at drake@60secondsonbusiness.