Some clients may use many of your accounting services, while many others may use only a few. As a result, most of your service revenues come from a limited number of your clients. This is not an accident, but rather a reflection of the so-called 80/20 rule, also known as the Pareto principle. To apply the 80/20 rule and make it work to your advantage, consider tailoring your marketing for each type of client you must achieve the best marketing results.
The 80/20 Rule
The 80/20 rule says that approximate 80% of the effects come from 20% of the causes. If the 80/20 rule holds true, 80% of your service revenues are driven by the top 20% of your clients. This happens when the top 20% of your clients use your services on a more consistent basis and require the most comprehensive and expensive among your offerings. The other 80% of your clients come to you only from time to time or may be even one-time clients, using your basic offerings that cost less, generating only 20% of your revenue.
For the 20% of your clients generating 80% of your service revenues, you should have more personalized marketing plans for them. It’s a tendency to treat all customers equally. You might respond to all your clients with the same amount of effort, including those that may cost you more in marketing than you make from them. It may be worthwhile to spend extra time and money and be more engaged with your top clients. For example, you may want to keep them informed about specialized accounting services you offer, such as one-on-one consultations to discuss complex financial matters, since they’re more likely to be receptive to having the upgraded service. Sending your top clients gifts on special occasions is also a way to keep them happy and ensure they’ll keep giving you business. Zero in on those 20% of your clients who are most vital to your business’ prosperity.
Following the 80/20 rule, you shouldn’t spend unjustified resources on marketing to the 80% of your clients who contribute to only 20% of your revenue. Automated marketing may be a more cost-effective way to communicate with those less lucrative clients in larger numbers. For example, you can use automated email marketing that uses preformatted templates; you can use a service such as Hootsuite to schedule marketing emails to save time. On the other hand, even if you can’t give individual attention to the 80% of your clients, you shouldn’t ignore them altogether, considering some may become more frequent users of your services over time.Applying the 80/20 rule to market your accounting business, you may be able to better predict your revenue by segmenting your clients based on the revenue they generate. This allows you to allocate your marketing resources more effectively, a move that can help you save money.