Two quick stories, then I’ll tell you how they connect and why they can uncover hidden profits in your business.
Do you know who the “Jills” are? Best Buy, the hyper-successful retailer of all things electronic, has decided they are important enough to devote special resources, employee training and store displays to them. “Jill” is a code name for a well-educated, affluent woman who is the primary shopper for their family but avoids electronics purchases due to intimidating, “geeky” salespeople who speak “tech” instead of what is important to the shopper.
A retailer I worked with found less than 10% of his shoppers were affluent, wanted the best solutions and had very little price-sensitivity. These few clients represented a whopping 60% of his profits each year. While the competition is busy with generic stores designed to appeal to every Tom, Jane and Mary, my client has installed a “store within a store” designed to highlight top-of-the-line solutions for his most discriminating customers. Results? Immense increase in word-of-mouth, increased big-ticket sales and deep appreciation from his “perfect clients” who finally have a place that caters to people “just like them.”
Is this an article about marketing to the affluent?
Not really. You see, there is a bigger picture.
When I work with new clients, I often encounter the following request: “I want more clients.” My response is a question: “What kind of clients do you want?” The (wrong) answer I most often get: “It doesn’t matter as long as they have money, we get a little bit of everyone in here.”
The right answer takes a little more thought.
When you really get to know your clients, you will find a small percentage account for most of your profits. In fact, it is common for less than 20% of your clients to account for nearly all of your profits. The big problem? Most businesses have no idea who those “perfect clients” are!
Do you know who your perfect clients are?
And if you do, can you tell me:
- Where they live?
- How old they are?
- What sex they are?
- How many kids they have?
- Do their kids go to public or private school?
- Where they work?
- What magazines they read?
- What organizations do they belong to?
- Where they regularly shop?
The name of the game is: Spot the Niche and You Grow Rich.
When you spot the characteristics your perfect clients share, you have found gold ready for mining. Something as simple as supporting the organizations your perfect clients are involved in can pay dividends. More aggressive businesses can, for example, rent a mailing list of married women, age 35-50, with at least 1 school-age child, subscribes to Better Parenting, has a household income of at least $100,000 per year and lives within 15 miles of the store, then prepare a special offer just for that “perfect client” niche that meets their specific needs and wants better than any generalist business can.
What should scare the heck out of independent retailers is that the big players are beginning to recognize and act on what I have described above.
When a huge company like Best Buy is providing customized services for their best customers, can you afford to continue treating all of your customers the same? The answer is clear: NO!
Let me offer three ideas that, if you did nothing other than focus on them for an entire month, you could add 50% to as much as 200% to your bottom line in less than year. What are the ideas?
Find out who your perfect clients are and do everything you can to: a) customize what you offer to those clients, b) let those clients know you consider them special and are treating them appropriately and c) attract more clients just like them.