Who are your best customers?

One of the most important value creation techniques over time is to improve your customer base. By moving to more profitable customers you can significantly rev up your profits. To do this you must identify your best customers. Once you identify these best customers you then need to learn more about them. Finally you take this knowledge and modify your offerings to attract more of them.

Your best customers are the customers that are easy to work with and order good quantities of profitable products. Namely they are high margin accounts. You can identify them by going through your sales records and your accounting records. Another way to identify them is to ask your salespeople. Customers who are profitable but make everyone tense or put the office in a constant uproar are not your best customers.

Once you identify your best customers you should ask them questions that will help you better understand them. By understanding them you can adjust your marketing and sales practices to obtain more of them. Appropriate questions are; why did you choose to buy from us? What features do you like the best? How have you bought these types of products before? Who else have you bought this from?

You also study them demographically and psychographically. Try to find similarities amongst you best customers. Then look at how other products they buy are marketed. Try to understand how they see themselves. Then take this information and modify your product offerings and marketing propositions based on your new understandings.

As always we suggest you try these new concepts within controlled tests wherever possible. Take one product or one service and make modifications and learn from it. As you begin to work out the bugs and sales improve with your desired groups then pull out the stops and watch margins jump.