Data is still coming in from our latest research survey and it continues to get us thinking.
Looking at the data so far, when asked how companies prioritize focus across their customer base, nearly 50% report that their first priority is on customers that generate the most revenue.
On one hand, that just seems logical. You certainly don’t want to risk a decline in revenue from those big customers…it could spell disaster. And you want to keep them happy so they don’t shift all that business to a competitor.
But there are also 3 very good reasons your largest customers should not receive all of your attention:
- They often aren’t your most profitable customers. All the attention spent on your largest customers adds to their cost-to-serve. Plus those big customers tend to demand the biggest discounts.
- They often have little growth potential. Your biggest customers are big precisely because you’ve likely already captured most of the opportunity that exists with them.
- They often end up concentrating your risk. Every company wants to minimize revenue concentration. But more time focused on your big customers means less time diversifying your customer base.
Where should you focus instead? 36% of companies in our study reported that their first priority is on customers that have the most growth potential.
And that doesn’t seem like a bad idea. Not only does that focus help drive profitable growth, but our data also shows that those companies are twice as likely to be very confident that they’ll hit quota this year.
That makes sense. Companies looking for potential growth should be much more confident about their numbers than ones who are focused on customers they’ve already tapped out.
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Eric Boles is vice president of publishing operations at MindBrew and a regular editorial contributor. He has over 15 years of experience in defining and executing strategies that have helped companies—both large and small—achieve profitable growth.
