Get to Know and Protect Your Vital Few CustomersWe have all heard the term “80-20 rule,” which postulates that 20 percent of causes drive 80 percent of results.

It is also called the “Pareto principle,” named for an Italian economist who noted that 20 percent of the people in his country owned 80 percent of the wealth.

Victor Ho, CEO and co-founder of FiveStars, and a contributor to Inc., believes there is a similar “vital few” when it comes to your customers. Armed with this knowledge, Ho contends, business owners can take a few simple steps to maximize their customer base.

Our company analyzed data from thousands of small businesses and our observation is that on average 20 percent of a small business’s customers drive over 72 percent of their visits.

By “vital few,” he is talking about customers who visited these businesses more than 10 times. These are the people who drive “the vast majority of visits and thus revenue for these small businesses.”

According to Ho, the implications of this analysis are three-fold. (more…)

chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram