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Holding onto the Critical 5%ers¨
It is no longer enough to sit waiting for the phone to ring, for customers to walk in through the doors or go galloping into the market with a great new product or service to sell. Today, everyone has to fight tooth & nail for market share. Even after establishing a market niche, companies have to keep fighting to defend them against hungry competitors.Many companies are now discovering the "critical 5%ers. Recent research is showing that for many companies, 5% of their customers bring in over 50% of their business. Because these 5%ers are so critical to the survival of the business, they should be considered as external assets. And, if they are assets, they have to be managed like other assets. Many business people hire a Broker to look after their insurance, superannuation, and other financial matters. Businesses have people to track shipments, manage accounts payable & receivable, manage the warehouse & hire a security firm to protect the premises. Many times when we ask managers who has direct responsibility for the critical 5%ers, the most common response are "what do you mean?" or "no one."
In today¡¦s business climate, three facts are clear:
* Most companies do not realise they have lost a major account, or it was under threat, until after the event & a competitor has established themselves in the account. The chances of winning it back then is about 3%
* Few companies manage the 5%ers effectively & treat them as the external asset they are.
* The management of the critical 5%ers is becoming more critical to long term business survival.
Every business must have a clear strategy to grow its business & defend its base.
Make it a company policy to personally visit your critical 5%ers at least every 3 months. The first question to the critical 5%ers must be: "How are we treating you?" In fact, it should be the first question to any customer on each visit.
"Survival Hints in Marketng" is produced monthly as a free newsletter to assist organisations increase sales, profits & market share. For regular copies, contact:
de Mamiel & Associates
Marketing & Management Consultants
20 Rosemary Court Huntingdale WA 6110
Telephone: (08) 9398 6775 Fax: (08) 9398 6774
Email: kedm@optusnet.com.au