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Not All Clients Are Created Equal

Not all clients are created equal.

 

Taking the lifetime value is not the only standard by which to determine the value of clients. You should also take into consideration the 80/20 rule ‐ also known as the Pareto principle. It states that for many events, roughly 80% of the effects comes from 20% of the causes.

 

You’ve probably heard of this rule before. It applies to client retention as well. You’ll get 80% of your business from 20% of your customers. Some customers will spend a lot and often. These are the most profitable clients and are your top 20%. These are the top tier clients you will want to prioritize in your client retention efforts.   

 

The majority of your customers will buy at least occasionally and not necessarily have large orders, but these customers are profitable and will represent the other 80% of your clients.

 

So the majority of your customers will fall in that category of customers representing just 20% of your revenue. Warning, these customers should not be overlooked.

 

Once you realize that these customers represent a distinct part of  your business, you will understand how to maximize their repeat business.