Sounds familiar? You urgently need a part for a leaky faucet from the building market? And there is no one who will help you find that special part? Or your car breaks down and there isn’t a garage that will help you due to a shortage of mechanics due to the holidays?
So, where did that empathetic manager go, the one the building market uses in its ads? Do you feel like humming Aye Aye Yippie Yippie Yee?
The 80 / 20 rule
Well, what you just found out is that you are only one of the many customers of the building market, you are reduced to a number. According to Pareto – famous for the (80/20) rule – you are one of the 80% group of customers that account for little more than short change. So, you must wait and are directed to the end of the line. Not exactly an experience that creates a (super) promotor for any company!
A-class customers
The Australian Professor Byron Sharp, well known for his contrary opinions, does not believe in putting all your effort into the 20% big A class-customers.
His argument twofold argument – as described in his book ‘How Brands Grow, Part 2’ http://bit.ly/2dsSFaF – is: (1) the 20% (A-customers) do not form a stable group and (2) real growth typically comes from (the 80% group of) small customers.
Not upstaged, upset!
Experience shows that giving priority to the 20% group can work out pretty poorly. Take the customer satisfaction survey that we performed for a community theatre. The staff had understood that there was no money to be made on small groups and school performances. The survey showed that these groups turned out to be pretty annoyed. Not exactly what management intended. So yes, even if you do not profit directly from these customers, it doesn’t mean that you should give them a ‘second class’ treatment.
Does this menu that Pareto’s 80/20 rule should be abolished? No, certainly not. Big clients certainly need a lot of attention.
But if you really want to grow, do not forget to be aware of the little ones!
Jan Mulder, Market Researcher and founder at Market Vision
Jan Mulder leads research activities at Market Vision. Jan founded Market Vision in 1996 after obtaining marketing experience at one of the first Personal Computer companies (Kaypro) and getting legal experience at Fokker Aerospace and Fokker Space. His current experience is based on a more than 15 years of research in the hotel industry with hotel chains like Radisson and Novotel. Jan also taught research at Windesheim Flevoland for five years. Jan lives and works in Amstelveen, near Amsterdam, Netherlands. Jan holds a B.A. from the University of Puget Sound and a M.Sc. from the University of Oregon.
