Every customer is different. And every business needs to identify their most profitable customers. By identifying customer profitability, you can grow each section of your company and in turn gain more profitable clients.
The most profitable clients aren’t those who spend the most money, as they are the people getting larger discounts and those who will take up the most business’ hours. Instead your most profitable clients are those who will end up providing referrals to new clients. This way positive word- of- mouth will act as credible branding.
Here are our tips for identifying profitable clients.
Constantly analyze customer data
You can be caught off guard if you don’t attempt to understand that you must constantly analyse customer data. Then when changes are made in your company, it will affect your business. Companies, who don’t keep track of their customer business, won’t be able to assess potential damage to their company when profits decline.
Management must be consistently analytical of their top ten customers to make sure they are taking care of the up- to- date list of profitable clientele.
Predict future revenue with CRM tools
Use technology to predict future revenue. By using a web based customer relation management tool to manage clients and predicts future business revenue. CRM tools allow the tracking of company activities or activities performed by individuals. It is a fantastic reporting tool which will make it easy to tell who your profitable clients are.
Don’t focus on big accounts
Big accounts don’t necessarily translate as more profitable. As referenced earlier, big accounts receive large discounts because of more business bought to the company. Those customers who pay on time and continue using your services are who you need to focus on.
Track service costs per client
Companies provide customers a variety of services. Companies charge per hour and others charge by a set of services or per month. Using time tracking software and income statements, you can accurately track cost of services. Management will produce monthly reports and will review them to make relevant adjustments.
Familiarize yourself with customer lifestyles
Use customer lifestyle to identify behavioral characteristics as predictors to increase value. By customer profiling you can brand yourself to your customers. Target those customers who are alike and have the same story.
Know your customers well
As the owner of a business you need to know your customers on an intimate level. You need to be able to describe them and their lifestyle in incredible detail. Paint a detailed picture of your customer. If you can’t, then keep researching. Get to know them better!
Getting new customers is easy, but keeping customers is the challenge, so make sure you keep in touch with existing clients. Social media is a great way to keep in touch. It’s an easy and inexpensive way to approach customers and keep them up to speed.
Make sure you have specific employees managing customer relationships. They can communicate frequently with them and advise them of new products and services.
Create time sheets for individual clients
Because very large clients take up more employee hours, they make a far less profit margin. Whereas, smaller clients require less time so there is a bigger profit margin. This is because smaller projects require less man hours.
Now that you know the best tips for identifying profitable clients, get out there and apply these simple pointers. Do you have any more ideas? Please share with us! We would love to hear from you.
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