Differentiating between a customer, consumer and client took me a while as they are often used interchangeably. I now clearly see that professionals like lawyers and doctors have clients they service, consumables like eatables and cosmetics are sold to consumers, and “useables” like clothes and furniture purchased by customers. Other than owners and lenders, only customers, used in the broader sense to cover both consumers and clients, provide a business money. In contrast, all other stakeholders be it employees, vendors, or government, who demand to be paid for their services.
Of the three sources of finance, customers are the most desirable source, for only they can ensure a successful business. Given their prime value, it is only natural to give every customer the highest attention. As businesses grows and customers increase, it is natural though not desirable for businesses to prioritise some customers over others based on their perceived value.
“Bigger the Better” is one of the three criteria used to prioritise. Target driven sales team is often the first point of a customers’ interaction. This often translates to a bigger customer getting better prices, higher priority and more personalised service. This prioritisation is most visible in single purchase businesses like real estate, where the builders prioritise the interest of large apartment buyers. Even in single purchase businesses reputation is built by word-of-mouth publicity. Hence, prudent businesses focused on building sustainable profits go beyond “bigger the better” and look at the other two elements.
Frequency is the second element that builds size over a period of time. More frequent, much better, as even smaller purchases repeated frequently gets bigger like the daily purchase has a 365 multiplier in annual sales. With frequency, the prioritisation is now balanced by looking at purchase over a period of time; the shift is from considering one-time purchase to purchases over a period. The period considered depends on the nature of business and the business leaders’ outlook.
Recency is the third element for prioritisation. More recent the purchase, sharper the memory in strengthening the relationship and make the clients more valued. Further, recency of purchases is often a good predictor of a repeat purchase.
Considering all the three elements, the most valued customer for a business is the one who is the biggest, most frequent, and the most recent. If an effective tagline is required for business, especially the sales function, Olympics with its Faster, Higher, Stronger tagline communicating the essence of competition provides the inspiration. Does Bigger, Frequent & Recent meet the test as an effective tagline for the sales function in prioritizing customers?
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