17 replies
Sitting inside your customer list, Ford's customer list
and Amazon's customer list are the few big spenders.

They will buy more If given the opportunity.

They are the 20%.

The 80% are those that suck up your resources are most likely un-profitable and pull down the star customers into averages.

If you want to lift profits, one way is to dump them.

Once dumped, here's how to fill your roster with top-tier customers...

You identify who are the big spenders in other businesses.

This is the 80/20 principle at the edge.

You aren't talking to, advertising to the great unknowns.

Only to those that are proven, big spenders.

The 20% or less at the edge of the 80/20% principle.

Ok, here are some examples of how this works.

Say you own an ordinary insurance agency that covers personal property.

What if you could identify those that own 3+ cars and their own home
within 10 miles radius of your office?

They are there for the picking.

You are a travel broker.

What if you can identify those that are planning to stay 8+ plus days
in a luxury hotel in a certain part of the country?

You can get them.

What if you can identify those that are planning to stay 8+ days
in a luxury hotel in a certain part of the country?

Big spenders at your fingertips.

Your client has a regional cellular coverage that has exceptional coverage.

What if you identified those that dumped their mobile co due to poor coverage?

Obviously, coverage is important to these people, so instant customers.
Yes, these are available.

Your wife has a line of fancy girl's dresses.
What if you can identify women who have spent $150 on a girl's dress?

Yes, they have been identified and are likely buyers.

Your friend makes amazing dog treats.

What if these treats are sold via subscription right across the country?

Cherry-picking those who are big spenders and who are most likely to buy
is available hidden in data collectors files.

I hope this opens your eyes to the possibilities of going straight to
the big spenders and not wasting time and money on getting low spenders.

Pure 80/20 principle thinking at work.

Best,
Ewen
#80 or 20 #customers
Avatar of Unregistered
  • Profile picture of the author GordonJ
    Originally Posted by ewenmack View Post

    Sitting inside your customer list, Ford's customer list
    and Amazon's customer list are the few big spenders.

    They will buy more If given the opportunity.

    They are the 20%.

    The 80% are those that suck up your resources are most likely un-profitable and pull down the star customers into averages.

    If you want to lift profits, one way is to dump them.

    Once dumped, here's how to fill your roster with top-tier customers...

    You identify who are the big spenders in other businesses.

    This is the 80/20 principle at the edge.

    You aren't talking to, advertising to the great unknowns.

    Only to those that are proven, big spenders.

    The 20% or less at the edge of the 80/20% principle.

    Ok, here are some examples of how this works.

    Say you own an ordinary insurance agency that covers personal property.

    What if you could identify those that own 3+ cars and their own home
    within 10 miles radius of your office?

    They are there for the picking.

    You are a travel broker.

    What if you can identify those that are planning to stay 8+ plus days
    in a luxury hotel in a certain part of the country?

    You can get them.

    What if you can identify those that are planning to stay 8+ days
    in a luxury hotel in a certain part of the country?

    Big spenders at your fingertips.

    Your client has a regional cellular coverage that has exceptional coverage.

    What if you identified those that dumped their mobile co due to poor coverage?

    Obviously, coverage is important to these people, so instant customers.
    Yes, these are available.

    Your wife has a line of fancy girl's dresses.
    What if you can identify women who have spent $150 on a girl's dress?

    Yes, they have been identified and are likely buyers.

    Your friend makes amazing dog treats.

    What if these treats are sold via subscription right across the country?

    Cherry-picking those who are big spenders and who are most likely to buy
    is available hidden in data collectors files.

    I hope this opens your eyes to the possibilities of going straight to
    the big spenders and not wasting time and money on getting low spenders.

    Pure 80/20 principle thinking at work.

    Best,
    Ewen
    Great advice, however lost on the WF great unknowns, at 99/2.

    I don't have a single Warrior on my customer lists, do you? Just wonder how many Warriors would even attempt to go after a big spender?

    One nice thing here, is, you can reveal great secrets (data mining and cherry picking) and tell all about ideal strategies to get buyers, knowing one would never generate a single competitor from the reveal, at least not here.

    Also, most would never ever pay for exclusive data which could be used to turn extremely rapid profits. Just my take on WF of today. OK, that's my 2 minutes this week at WF.

    GordonJ
    {{ DiscussionBoard.errors[11555819].message }}
    • Profile picture of the author Claude Whitacre
      Originally Posted by GordonJ View Post

      Great advice, however lost on the WF great unknowns, at 99/2.

      I don't have a single Warrior on my customer lists, do you? Just wonder how many Warriors would even attempt to go after a big spender?

      One nice thing here, is, you can reveal great secrets (data mining and cherry picking) and tell all about ideal strategies to get buyers, knowing one would never generate a single competitor from the reveal, at least not here.

      Also, most would never ever pay for exclusive data which could be used to turn extremely rapid profits. Just my take on WF of today. OK, that's my 2 minutes this week at WF.

      GordonJ
      Mostly agree about WF. But there are still several really sharp people here...real marketers.

      As far as Ewen's information, it's absolutely spot on. One of the biggest gains I ever made in selling was identifying who was highly likely to buy, and not seeing the others.

      Even in my store, I have a referral program that gives gift certificates for referrals, and for the new referred customers. But the original customer has to make at least a $399 purchase to get offered the deal. Why? Because people who spend more...know others who spend more. And, maybe the biggest benefit is...they only know others who spent a decent amount with me, so the higher dollar purchases are expected.

      I had a friend in the mattress business (he had a store) and he advertised quite a lot. He was complaining to me that nobody was buying anything but the very cheapest mattresses.


      I told him" Why would they want anything better? Your advertising is only attracting the low price shopper, and you complain when they show up. You are completely ignoring the people looking for a great mattress, and are willing to pay to get it."

      Of course, that went against his grain, and he eventually went bankrupt.
      {{ DiscussionBoard.errors[11555831].message }}
      • Profile picture of the author ewenmack
        About most won't buy these lists of big spenders on this forum.

        Back when I did consulting, most of my clients I had never seen post on this forum.

        So it probably will be true in this case too.

        Best,
        Ewen
        {{ DiscussionBoard.errors[11555851].message }}
        • Profile picture of the author ewenmack
          I'll do a follow-up post showing an example what the message can look like so it 's personalized.

          Once again working the 80/20 rule that states some things make a big difference while others don't..

          Personalization of the message is
          one of those enduring principles.

          Best,
          Ewen
          {{ DiscussionBoard.errors[11555856].message }}
          • Profile picture of the author GordonJ
            Originally Posted by ewenmack View Post

            I'll do a follow-up post showing an example what the message can look like so it 's personalized.

            Once again working the 80/20 rule that states some things make a big difference while others don't..

            Personalization of the message is
            one of those enduring principles.

            Best,
            Ewen
            Ewen, you've mentioned in the past about how getting hold of these lists will allow one to write what comes across as a PERSONALIZED letter, the reader has to think this was just written for me, being unaware he is on a list of others. Do you offer any coaching or information on the lists or data bases you use?

            GordonJ

            PS. Regarding my snarky comment on the WF, and to Claude, yes, I know there are sharp marketers, all 28 of you. And most hang here in offline. Just grew tired of eternal hope, and drama queens, same old same old...but really, a supposed million members and still a ship without a rudder drifting on the high seas of IM????
            {{ DiscussionBoard.errors[11555912].message }}
            • Profile picture of the author ewenmack
              Gordon, I don't offer any training on how to source these lists. I will work with a client who wants to reach only big spenders as an added service when buying these lists.
              {{ DiscussionBoard.errors[11555920].message }}
            • Profile picture of the author ewenmack
              Gordon, I don't offer any training on how to source these lists. I will work with a client who wants to reach only big spenders as an added service when buying these lists.
              {{ DiscussionBoard.errors[11555922].message }}
              • Profile picture of the author ewenmack
                A mistake in thinking when targeting big spenders is that if they have lots of money
                they will buy.

                Couldn't be further from the truth.

                She waits till near closing to get discounted bread from the bakery, but splurges on ripping out her kitchen every year for her dream kitchen.

                One kitchen renovation has some of these women clients.

                Got to identify what they buy and do so freely with abanment.

                Best,
                Ewen
                {{ DiscussionBoard.errors[11555924].message }}
  • Profile picture of the author savidge4
    <--- drives more than one Ford, AND has more than one Amazon account I MUST be a big spender!!!!! Woo Hoo

    < looks in wallet > $1.00 to my name - WTF?!?!?! Oh first of the month, and all the payments for the Ford's were due.. DAMN ( J/K ) they are all paid for LOL

    As it relates to this discussion, there is "The World" as WE know it, and then there is DATA that displays "The World" for what it is. And DATA changes your outlook on a whole lot of things.
    Signature
    Success is an ACT not an idea
    {{ DiscussionBoard.errors[11555921].message }}
  • Profile picture of the author misterme
    I don't use lists but I do fish for the 20% and my pricing and everything I say and do is aimed at the 20%. The result? For the past three years I've worked only a handful of weekends a year yet have made as much or more than when I was at it every day.
    Signature
    "Best book on answering objections I have seen... it's for photographers but it has brilliant techniques you can use in any business." - Claude Whitacre. When They Say That, You Say This (Amazon Kindle)
    {{ DiscussionBoard.errors[11556052].message }}
  • Profile picture of the author angrybudcom
    If you skip those 80%, then your 20% will split in its turn into other 80/20. Math, basically. That's how universe works. Like if: 80% of sex one gets from 4th wife, hahaha ))) but if one skips first three, he'll stock again with the first wife and lose in amount. Simply means: that those 80% of customers change you, want it or not. Why not get some value from them then. Hope this forum is okay for a straight forward stuff, I'm new here.
    {{ DiscussionBoard.errors[11556519].message }}
    • Originally Posted by angrybudcom View Post

      If you skip those 80%, then your 20% will split in its turn into other 80/20. Math, basically. That's how universe works. Like if: 80% of sex one gets from 4th wife, hahaha ))) but if one skips first three, he'll stock again with the first wife and lose in amount. Simply means: that those 80% of customers change you, want it or not. Why not get some value from them then. Hope this forum is okay for a straight forward stuff, I'm new here.
      You are mistaking how this works.

      If you take the most profitable, active, result producing 20%, you will find that this exceptional top group again divides into an 80/20 split. But they will, as a group, still be the same group that is 80% of the profit from the original group. You'll just end up with a 20% of the 20%...which will give you a very profitable 4% that will be responsible for most of the total profit.

      The point is that every customer group has a large percentage of unprofitable...or barely profitable customers, and a very small number of hyper profitable customers.

      In the same way, most industries have a huge number of people barely scraping by, a small number of successful business owners, and a very small number of industry leaders.

      It's always going to be that way, because a very small percentage of customers or sellers is exceptional.

      80% of the books are sold to 3% of the adult population in the US. About a fourth of the adults never read a single book their entire adult lives. You can apply the 80/20 rule to almost any group.

      Added later;
      There is an exception to this. If you have a finite number of offers and a finite number of customers.

      For example, you own a furniture store. You find that 80% of the buyers buy 20% of your selection. So you stop selling the losers and only sell the top 20%. That top 20% will now break down to another 80/20.

      The problem is, you still have the same number of people buying, and the same number of sales. This is assuming that the prices and profits are the same all around.

      In our store, we found the 20% of vacuum cleaners that 80% bought (although the percentages are skewed a little). We tried just reducing the number of items available, and only selling the most popular vacuums.

      A problem arose. We used to have 5 times the selection. It was that image of a large selection that helped sell the 20%. When we reduced the number of available items, it lowered our overall sales.

      so..the 80/20 rule is a good one in principle, but it doesn't apply universally.

      For example, you have a choice of 5 offers for a prospect to look at. 80% of the time they choose the most popular offer. So you just reduce your offers to that one popular offer. The problem is, the image of choice has been lost.And that choice is integral to the buying process.
      {{ DiscussionBoard.errors[11556526].message }}
  • Profile picture of the author ewenmack
    Years ago I would get rid of my worst clients when I had my lawncare biz.

    I graded them from A to D grade.

    D's and some of the C's went.

    They made room for more A and B's.

    Gotta keep the weeds out on an ongoing basis because they will keep coming back.

    Best,
    Ewen
    {{ DiscussionBoard.errors[11556529].message }}
    • Profile picture of the author misterme
      Originally Posted by Claude Whitacre View Post

      We used to have 5 times the selection. It was that image of a large selection that helped sell the 20%. When we reduced the number of available items, it lowered our overall sales.

      so..the 80/20 rule is a good one in principle, but it doesn't apply universally.

      For example, you have a choice of 5 offers for a prospect to look at. 80% of the time they choose the most popular offer. So you just reduce your offers to that one popular offer. The problem is, the image of choice has been lost.And that choice is integral to the buying process.
      So I used to sell various items in different sizes but them I reduced that to one item, though in different sizes and with one upsell item. And what I changed about that then was I went from 14 different sizes eventually down to 7 sizes. Sales averages are up this year -- but mostly because of sales techniques. Prices have remained the same. Narrowed selections make the sale happen faster but also help "force" a selection to jump up and order what would have before been a few sizes difference where they would've landed lower. So that's been a factor in boosting the lower tier of orders up a bit.

      Originally Posted by ewenmack View Post

      Years ago I would get rid of my worst clients when I had my lawncare biz.

      I graded them from A to D grade.

      D's and some of the C's went.

      They made room for more A and B's.

      Gotta keep the weeds out on an ongoing basis because they will keep coming back.
      So, speaking of the weeds who keep coming back, I found that those who cancelled appointments and rescheduled would either not keep the rescheduled appointment or not order for the most part when they did come in. The numbers showed they averaged half my first time client order. That's Grade C. So I started discouraging reschedulers from taking more of my appointment times that could be going to first time clients.
      Signature
      "Best book on answering objections I have seen... it's for photographers but it has brilliant techniques you can use in any business." - Claude Whitacre. When They Say That, You Say This (Amazon Kindle)
      {{ DiscussionBoard.errors[11557140].message }}
      • Originally Posted by misterme View Post

        So, speaking of the weeds who keep coming back, I found that those who cancelled appointments and rescheduled would either not keep the rescheduled appointment or not order for the most part when they did come in. The numbers showed they averaged half my first time client order. That's Grade C. So I started discouraging reschedulers from taking more of my appointment times that could be going to first time clients.
        When I sold in people's homes, and they rescheduled an appointment, I found two things;
        1) They were apt to reschedule repeatedly, or cancel.
        2) They bought a little easier if I actually got to see them. But they were also much more apt to cancel the sale. It got to the point that I'd just asked them to call me when they had the time.

        But if I had to reschedule (because I was on another appointment,), and made the appointment the next day, they were slightly easier to sell, because i was showing that I was busy.

        And I made sure never to reschedule an appointment more than once. To me, that was just rude. (on my part).

        But coming into my store for an appointment? (sometimes after regular hours) Yeah, if they didn't show the first time, they were unlikely to show again, and they were less likely to buy when they did show.

        It got to the point that I would just write them off.


        By the way, the most common excuse I would get for a cancelled appointment was that someone close had died, usually their mother. And the most common (way more than 90%) reason for cancelling a sale was that they got laid off their job the day after they bought from me....

        In the history of the United States, I think my selling caused more deaths and layoffs than any other single source.
        {{ DiscussionBoard.errors[11557148].message }}
      • Originally Posted by misterme View Post

        So I used to sell various items in different sizes but them I reduced that to one item, though in different sizes and with one upsell item. And what I changed about that then was I went from 14 different sizes eventually down to 7 sizes. Sales averages are up this year -- but mostly because of sales techniques. Prices have remained the same. Narrowed selections make the sale happen faster but also help "force" a selection to jump up and order what would have before been a few sizes difference where they would've landed lower. So that's been a factor in boosting the lower tier of orders up a bit.
        There is a difference. You were actually offering all these options. In my store about 90% of the inventory wasn't really there to sell, but to provide the illusion that I had a vast selection.

        Most of the vacuums in the store were just there to provide price points, making a different vacuum cleaner look like a better bargain.....or to show that we carried the brand they were looking for, so that we could compare them to the better brands.

        The first several years we had our store, we had over 100 different models displayed on the floor. But the truth was, maybe 5 models accounted for 90% of our sales, and another 20 models accounted for the other 10%. Most of what we had on the floor, we only had that one unit. But they all served their purpose.
        {{ DiscussionBoard.errors[11557185].message }}
  • Profile picture of the author ewenmack
    When I had the lawn care biz, the callers wanting a quote that day
    would follow the same pattern as a client,
    you had to get their lawns mown on a certain day
    and most likely had to be in the morning or afternoon.
    or you wouldn't get paid.

    So I stopped taking phone calls during the day
    and followed up phone messages in the evening.

    That weeded out them.

    The little old lady was happy to wait and happy to have a man
    come in do a proper job within a day or two of the last cut.

    She would pay top dollar and refer friends who were like her.

    This was opposite of what "you are meant to do",
    pick up the phone when the phone rings.

    Best,
    Ewen
    {{ DiscussionBoard.errors[11557178].message }}
Avatar of Unregistered

Trending Topics