On the need for customer base analysis

The customer base is an indispensable tool for managing business, in particular, company sales. With its help, you can effectively predict future activities, improve the conditions for cooperation with existing partners, and attract new buyers. But not always the presence of a wide client base for the company promises her a high level of sales. Why?

To answer this question, one of the primary economic rules should be recalled: the Pareto principle. Its essence is that "80% of the income is brought by 20% of customers." That is, work with the customer base should be aimed mainly at finding "quality" customers or, in other words, target customers.

Often, company managers enter into the customer base all the counterparties with whom they have ever had to collaborate. In most cases, transactions were one-off. Thus, the scale of the customer base is "inflated" to incredible sizes. If the work of managers is organized in this way, then the company does not have target customers and does not set as its goal their search. The time and effort of employees is wasted.

Analysis of the client base should be carried out at least once every two years. The language of numbers will allow an objective assessment of the current situation. Database optimization can be done using ABC analysis.

The essence of this method comes down to ranking the list of customers - each of them is assigned a certain place in the common base according to a given criterion, which can serve as net profit or sales. Depending on this indicator, the buyer is assigned a category - A, B, C or D. Thus, it will be clear with which counterparties particularly close cooperation should be conducted.

The choice of target customers can be influenced by objective and subjective factors. Objective, for example, may be the scale or type of activity, subjective factors are the client’s interest in the company's products, corporate culture, etc.

Of course, after carrying out a laborious process to optimize the client base, effective solutions should follow. For example, carefully monitor the extension of contracts, if necessary, reach a compromise by reviewing pricing policies, establish friendly relations, and introduce bonus and reward systems for key customers.

Namely, working with a client base in the direction of its qualitative improvement, you can achieve a high level of sales. Moreover, without wasting human and temporary resources on consumers with small and rare orders.