Keeping High-Profit Customers

I'm writing this based on bricks-and-mortar businesses and direct sales. (I'm condensing this a lot.)

It can be dangerous, financially, to serve low-/no-profit customers. They may demand the same amount as or more service from the staff than high-/medium-profit customers.
This means-

1) Some (valuable) customers may not be served satisfactorily and go to competitors.

2) It's bad for staff morale if they're being pulled in too many directions at once.
2a) They may be able to serve fewer customers and still bring in enough to cover overhead and generate profits, if they're serving high-/medium-profit customers.

3) It uses up payroll inefficiently. By using database marketing (recording customer information), high-/medium-profit customers can be called or sent letters (e-mail or postal). This means attractive offers can be sent to them instead of to the general public or the whole customer-base.

I realize some low-/no-profit customers may become high-/medium-profit customers in time. It may be best to refer them to a business (a competitor) that has a different cost structure and can serve them better and profitability.

High-/medium-profit customers are apt to be those who may 1) buy often; 2) buy a lot per transaction; and don't tie up the sales staff up for long periods of time.

Since the average American moves every 4-5 years and/or changes e-mail addresses often, it's vital to give them ample incentive(s) to keep their information in your database up-to-date. What constitutes ample incentive(s) is up to them, not up to us, to decide. (Ask them.)

Since high-/medium-profit customers probably value your products/services, it shouldn't be hard to get their input.
Here's a sample script-
"Since it seems that you enjoy what we offer about as much as we enjoy serving you, I think it may be important to you to keep getting notices of offers and new products/services. If we're able to send you notices by e-mail, we could offer you lower prices because e-mailing notices saves us money. Would you like to receive our notices personally, by mail, or through the mass media?
What is your (e-mail) address? -OR-
Which radio station do you listen to most?
Which newspaper do you read most often?

Thank you for the information, to show our appreciation, here's __. Would you please be sure to keep us updated on changes of your (e-mail) address so we can keep you updated?" Whatever you say, practice it so you can say it smoothly and confidently. If you're shy about asking, then your customer is apt to be shy about answering the questions. Just ask calmly and reverently as if it's just a regular part of business.

In my post above I wrote-
I'm writing this based on bricks-and-mortar businesses and direct sales. (I'm condensing this a lot.)

Evidently, I condensed my post too much.
People have respond negatively to it in another venue, so I'd like to try to keep you from misunderstanding my points.

There's a maximum number of customers that any one business or salesperson can serve.

Since Wal-Mart gives very little service, its cost of fulfillment is low. So, it can afford to get small amounts of money per customer, as long as each store takes in a minimum dollar amount everyday.

But a service intensive business that has a high cost of fulfillment can't afford to have a lot of small transactions, why? Because small transactions may take up just as much time and energy as big transactions.

In the beginning of a business or a sales career, it may be necessary to serve whomever is able to buy. After the business or career is established, it's vital to concentrate on customers who are most interested in what you offer and are able to pay for it.

I also wrote that it's best to concentrate, preferably through direct mail or e-mail, on marketing to high-profit customers. I'm not suggesting that you slam your door in anybody's face. Don't insult anybody.

You can get more high-profit customers with referrals. If you'll ask any customers for referrals, I advise you to ask your high-profit customers. They're more apt to know other people, like themselves, who may become high-profit customers.

I know it sounds mercenary, but as a marketing consultant, would you want me to help you reach people who will pay you $2,000 per year or people who will pay you $20 per year?

It'd be my job, as I understand it, to help you reach and keep those who will pay a lot of money. I'd also advise you not to turn up your nose at anybody.

The way you handle low-profit customers is up to you and your business category. I'd advise you to use a form of what I'd say to somebody who can't afford my service.

"What I can do for you is give you some high power information and my free service. This way, you can keep the money you take in. You can invest that money back into your business and help it grow even faster. After using these, you're business will grow to the point where you're serving more customers and you won't have time to run your marketing program. At that point, you'll have money that you can spare and you'll need my full-service."

Thank you for using my blog. Please let me know if I should clarify anything.

Copyright 2016 Dennis S. Vogel All rights reserved.
When you compete against big businesses with big budgets you need powerful marketing strategies & tactics. You'll find them here-
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