Proactive Means of Growing your Business using the 80/20 Customer Gold Program. How much does it cost to obtain a new customer? The most popular answer author, Dale Richards receives from CEOs across the country is “A Lot”. Large sums of money are spent to secure new customers but if we just have a reactive customer service program then we lose the opportunity to grow the business significantly.
What is the Pareto Principle? The 80/20 Rule. This rule was developed back in the 1880s by an Italian/French man and it applies today. What are some examples of the 80/20 principle?
· 80% of your revenue comes from 20% of your customers
· 80% of your revenue comes from 20% of your product line
· 80% of your output comes from 20% of your employees
· 80% of your problems come from 20% of your customers
· 80% of your employee problems come from 20% of the employees
How can you use the 80/20 principle to PROACTIVELY increase your revenue by 10% – 200%?
First, you must find out who the top 20% of the customers are. Take your customer sales data for the last two or three years and download this data to a spreadsheet. Once it is downloaded sort from highest revenue to lowest. (You should also look at the customer by margin.) Add a column for cumulative percent on the side of the revenue sort. Sum each row until you reach 80% of the total revenue. Now you know the top customers.
80/20 Customer Gold Program TM was Seth Dawson’s, Baton Rouge, LA, favorite of Dale Richards Valuation Presentation where he learned key business concepts from Dale Richards’ presentation on Business Valuation Principles – How to Increase Your Business Value, Financially, Operational and Strategically.
Learn more about Business Valuation Principles by Dale S Richards http://a.co/cVsYyNNhttps://successbiznow.com/books/business-valuation-principles-by-dale-richards/