Byron Sharp[i]
found that Pareto’s 80/20 principle is a misleading simplification within a
number of markets. Research found that the Pareto principle in a number of
countries amongst a number of categories are closer to 60/40, that is 60% of
the turnover comes from a 40% customer base, or even 50/50.
Coca Cola describes a ‘heavy’ user as someone that purchases
Coke 12 times a year! Hardly what we expect!
I expect that within services this principle would be even
lower.
This week ANZ announced a full year profit of $5.66 billion http://bit.ly/S1ReeR noting the bank’s ability
to ‘adapt to a changing environment’ as one of the reasons for its success.
Peter Drucker said 'because its purpose is to create a customer, any business enterprise has two and only two basic functions: marketing and innovation'.
If service organisations want to thrive, they need to
develop innovative strategies to attract and retain the attention of a much larger
customer base that doesn’t necessarily spend significant amounts with the
organisation.
This is where technology plays a major role. We have to get
smarter at using technology to identify and ‘draw in’ customers into the sales
funnel. I will discuss various strategies in my upcoming blogs.
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