Most of us would have heard the story of Bamboo Tree , just to refresh your memory, the story is about Growth and sustaining it ...
When a Bamboo Tree is planted for first four years it hardly grows but in fifth year the growth is exponential. So few people will say that for first four years what was the tree doing? why the growth was so slow?
The answer is simple , to sustain the exponential growth the tree has to form a strong foundation ( roots) and the foundation has to be so good that it can bear the load of exponential growth .
you would be wondering why I have mentioned this story in COVID situation , as I mentioned in last blog (https://freesaletips.com/reset-button-part-1-covit-19-during-and-after-some-tips-for-small-medium-businesses/) that this period of lock down can be used for Self Reflection , Skill Building, Create Digital foot Print for your business, Revisit your operational efficiency and Team Building ( In case you want to know how – contact thru comment section below or mail – these are all free tools,will be glad to help)
In this section of my Blog, I will try and update about a simple concept through which I have been getting excellent results and I have seen and studied that 100’s of companies and professionals have gained from this concept. People who know me would be recalling that we have been discussing this concept regularly in day to day basis. This concept is Technically called Pareto’s Law or the 80:20 Principal.
According to this theory 20% of your customers gives you 80% of Business and balance 80% contribute to 20% of business . Ironically most of our time is wasted or drained in servicing these 80% customers, majority of our bad debts, complaints etc are from these customers… ( U can check ,this holds true in most cases)
Now During & after COVID Lock down:
- you Should identify your top 20% customers and create an emotional bond with them ( root formation)
- Try and Create tailor made strategy to Retain them (0 -4 years period) as they are back bone of your business.
- Now the most Interesting part of this strategy is that your competition also has a set of 20% top customers who contribute 80% to their business !!!
- Interesting isn’t it ?
- Now if you can work out or find out such customers (or may be you already know) and utilize this period to crack them or at least break ice with them, you will find that after lock out you will get exponentiation growth ( Bamboo 5th Year)
It is no brainier that after lock down there can be huge impact on consumption and only those will survive who are able to Retain their customers, smarter one will snatch competitor customers too!!
…… To be continued ….
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But considering the current financial grim there will be few brave people investing…
Challenge ahead for them to establish as the customer’s mindset shall be tentative too…
But the positive aspect is lesser competition as well.
good
In current situation. In my industries many new compony tr to poaching our network .we need tobe cautious .
Also involving the in some extent in your action plan may help
thanks a lot
agreed that there will be a surge in demand, post lock down and we should capitalize the opportunity to retain that 20% of our customers , by servicing them better; however the luxury of the present chance has to be spent ‘ to look within ‘ and take corrective measures to retain this lot; I think we should be ready with that ‘ extra advantage’ to get a share from competition- strategies and policies should be in place
Dear sir
Pareto’s theory is true 80% of business contributing by 20% of customers and 80% of customers contributing only 20% of Business. But in practical when we are trying to hold competitor’s 20% of solid customers automatically our main 20% customers are losing due to neck to neck competition among these customers who are standing on the same line. Finally lot of chances is their we can loose our existing Main customers if they knows our attempt on competitors Customer and Competitors customers also will not show interest because his nearest competitor already dealing with us. Than lot of chancese is their we can loose business from both Customer.
This is my personal experience when I am in America Standard Bath and Kitchen India Pvt Ltd.
Sir in my view weaker competitor will be out and organised sector will gain in terms of market share.
Central bank will pump trillion money in market of liquidity and same time interest rate will also come down .
Alternative competitor product in decorative sector mainly import one will decrease due to increase in dollar because that time they will not able to compete with local one due to increase in cost .
In end numerical and extension reach should be increased because every good dealer also are suffering form this situation .
1. Gst refund will delay
2. Cash flow will try due to liquidity issue .
3. inventory cost will decrease due to asset price will collapse.
Thanks for inputs
Yes… This is one of the easiest way to understand
Learning how to unload myself from the thought of completing all task… Stop carrying and learning not to be puzzled alone
Dear Sir,
Wonderful perspective to utilize this lockdown period, all the tips are very useful.
1. You have pointed out very truly that everyone forgets 20% loyal customers who give us 80% of business, but we are after 80% customers who usually give us 20% business, thinking that once they come in our fold, our client base is 100% complete, in this process, those 20% loyal, big customers slip away from our hand because we never try to take from them feedback of quality, service,market acceptance of our products & their profitability while dealing in our products. You cannot expect someone to be loyal with less or no profit, secondly competitors are also waiting for poaching on our cream customers, So always be in touch with them.
2 . Secondly, I had read somewhere that a manager should be a very good teacher, there can be on the job training for juniors, once you teach them, you can easily deligate & make yourself free for other important works, but very few bosses are good teachers also, in my 35years career, hardly 2-3. Bose’s were keen to train. Nowadays seniors are attimes feeling insecured in training juniors, feeling either they will move ahead or maybe become their competition, so why hire trainers, instead train your team & become true leader for them.
Good brain storming session…