Knowing your customer is the key

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The Independent Online
CYNICISM about advertising and marketing is hardly novel. Nevertheless, Jay Curry does strike a chord when he says that efforts to come up constantly with new approaches are wide of the mark. In fact, he suggests they are themselves really efforts at marketing rather than attempts to help companies sell more products, writes Roger Trapp.

In his book, Know Your Customers, How Customer Marketing Can Increase Profits, recently published by Kogan Page, Mr Curry says that the manager can ignore such concepts as 'action marketing', 'interactive marketing', 'database marketing' and the rest. All he needs to know is in the title of the book. That, of course, is a little simplistic. But Mr Curry, director of an international management consultancy specialising in marketing and sales productivity, does have a point.

By getting to know customers better, it is relatively straightforward to discover which of them account for the majority of sales.

This emphasis on the customer fits neatly into the current management thinking that says 'The customer is king', but is no less valid for that. As he says: 'No matter what products and services you provide, be it bars of chocolate, computers, insurance or temporary staff, customers are the heart of your business. When you get right down to it, the one single thing a company needs to be in business is a customer.'

It follows, then, that the key to business success lies in developing good customers. And this is where the idea at the centre of the book, the customer pyramid, comes in.

It is a way of finding out what kinds of customer - and how many of each type - a company has. It is likely that the customer base will consist of a small number of high-volume customers, a larger number of medium-volume customers and many more low- volume customers. There will also be starters, prospects - divided into hot, warm, cold and leads - and suspects and then the rest of the world.

On completion of the exercise, many companies find that 80 per cent of sales and profits comes from 20 per cent of the customers. What a business needs is more such customers and getting them is what customer marketing is all about.

Making this work can be achieved through 10 steps, says Mr Curry, and much of this slim paperback is devoted to them. However, while the strategy is simple, implementing it is not.

'More often than not, managers underestimate the internal changes in the minds of the people and the information systems which customer marketing requires,' he says.