Maximizing the 20/80 Percent Rule in Marketing
August 2005
The widely-accepted belief in marketing is that 20 percent of your clients provide 80 percent of your revenue. Do a little digging and you'll find that generally holds true. But knowing that information is only half the battle. Some read that statistic and think, "Bingo! I only need to focus on that 20 percent." Many more believe that they are already serving that 20 percent just-fine-thank-you-very-much and turn all of their efforts to developing new business. The real value lies in understanding how to serve and cultivate different groups of clients. To that end, here are six simple rules for maximizing the 20/80 percent rule in marketing:
- Know your top 20 percent. Many law firms think they know
who their top revenue producing clients are, often relying on the attorneys
to identify them. Not good enough. Invest in some market research. Comb
through your receivables. Compile data. Create spreadsheets you can sort.
Yes, it's time consuming, but it's also time well spent. And you may be
surprised by the results.
- Know where the top 20 percent is spending their money.
The good news: your top client brought in over a million dollars in corporate
work last year. The better news (from a marketing perspective): your top
client only brought in $200,000 in all your other practice areas combined.
This is an opportunity! If your firm is like most firms, cross-selling is
still a dirty word. It's time to change that. You have the advantage here.
Your client knows you and trusts you. What's more, you know the client and
the issues that are keeping him or her up at night. (If you don't know this,
it's time to ask.) You don't need to engage in a hard sell, but it would
be a good idea to introduce some of your colleagues who can bring value
to the client. Even better, brainstorm ahead of time to come up with solutions
to issues your client didn't even realize he or she had. Just remember,
keep it about the client, not your firm.
- Keep that 20 percent happy. Don't get complacent and
just send bills. Drop a note or e-mail if you see a relevant article. Send
a gift thanking the client for his or her business. Support a charity that
is near and dear to the client. And be candid. Ask every once in a while
if the client is happy or if there is more you could be doing to help his
or her business.
- Groom tomorrow's 20 percent. Back to the other 80 percent
of your clients. Don't ignore this group. While they may not be bringing
in the big bucks, some of your most ardent supporters can be found here.
They usually know they are the bread and not the butter of your business,
so they are even more appreciative of professional, personalized service.
For example, while you can't send a holiday gift to all of your clients,
you can send a card. And since they will generally have less face time with
you than larger clients, make the most of it, giving them your undivided
attention and really listening to their needs. That way, when they do have
more business to bring, they'll think of you first. And remember, these
people have friends, which brings us to...
- Ask for referrals. A referral from a happy client is
worth more than all the advertising, sponsorships, speaking engagements,
and PR combined. It is perfectly appropriate to tell a client that your
firm is always looking for quality clients and believes the highest quality
referrals come from current, valued clients. They'll be flattered that you
asked.
- Cut out the deadwood. Speaking of quality clients, I'm sure you have some who aren't. Identify them and stop putting any energy there. "Fire" them if you have to. See, now you just made more time to cultivate the rest!
Anne Parys