Many businesses spend a lot in advertising and marketing to acquire new customers. Upon acquiring new customers, their marketing job is over. This is a terrible mistake.
Acquiring new customers who made their first purchase is just the intermediate stage of marketing. Changing them into your faithful, loyal customers is the end goal. Make them stay and only buy from you.
The 80/20 Rule was suggested by a management thinker, Joseph M. Juran. It got its name after an Italian economist, Vilfredo Pareto. He observed and realized that 80% of Italy’s income was from 20% of the Italian population.
You may also put it this way; 20% of your activities produce 80% of your financial rewards. You can definitely apply the 80/20 Rule in your business or working life.
Here, we will be discussing where your profit comes from. According to the 80/20 Rule, your profit comes from the top 20% of your customers. This 20% of your customers are your loyal customers or your brand ambassadors.
It costs 6 times more to acquire a new customers while your brand ambassadors are your unpaid sales force as they will likely recommend their friends and families to buy from you.
Thus, how to create this 20% of loyal customers? Make them feel good. One of the many ways is to reward your customers with reward points. Make their purchases count.
Upon hitting certain threshold, let them purchase for free. Who does not like freebies. Once your customers stick to you, your business grow.
You can also have special events like Members Day. Have a countdown to your Members Day. Hush those who are not your members yet to sign up.
Mark down your merchandises exclusively for the day. Example, 50% off, FREE gifts along with purchases. Let them feel privileged.
Besides these, always keep in touch with your existing customers. Send them newsletters to keep them updated and have offers from time to time. You may send out coupon codes in the newsletters to your existing customers for them to enjoy the deal. Make them happy.
The 80/20 Rule of Relationships is how you make your business profitable. We are not saying you should stop acquiring new customers. Just remember where your real profit comes from. The top 20% of your customers. Do not ignore them.