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A guide to identifying your profitable customers and improving your sales (1)

One of the common strategies for increasing your sales revenue is targeting your most profitable customers.



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One of the common strategies for increasing your sales revenue is targeting your most profitable customers. Customers are not all equal. Figuring out how profitable your customers are, can help you grow every facet of your company. These won’t necessarily be the ones who spend the most —some of your customers who spend the most money won’t be profitable, as they may have negotiated heavy discounts or might require more customer support. The key is to identify those customers early and adapt your sales strategy accordingly.

You can use different measurements to identify your most profitable customers. For example, you can analyze your previous sales to find out who they are, take note of what they buy and when they buy it. You can then segment your customers and the products or services they buy into one of four categories:

  • High sales and high profit
  • High sales and low profit
  • Low sales and high profit
  • Low sales and low profit

Some important tips for companies in view of customer Service Week 2019, Polarization: How to attract the right customers, while keeping the ‘’wrong’’ ones out

It’s a good idea to focus on customers that provide high sales and high profit. However, customers that provide high profit on low sales can also help boost profits. If customers are providing low profit from high sales, you should think about adjusting your pricing to see if you can generate more revenue from these sales.

What makes your customers valuable?

Analyzing your customers allows you to identify those who best fit your business priorities. This will depend on your strategy; for example, if you are launching a new product, your aim might be to build sales as quickly as possible, whereas if you have cash flow problems you might value customers who pay quickly.

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[READ MORE: Here’s how your business can grow revenue in tough conditions (PART 1)]

However, most businesses want customers who are as profitable as possible. Customers tend to be more profitable if they:

  • Buy high-margin products.
  • Pay full price without negotiating discounts.
  • Place a small number of large orders rather than many small orders.
  • Do not cancel or amend orders.
  • Pay on time, without being chased for payment.
  • Do not require extensive after-sales service.

By analyzing your records, you can assess how profitable each customer is. In some businesses, just a few customers are responsible for almost all the profits. Some of your largest customers might be among your least profitable. You may even find that there are some customers you would be better off without.

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You should also try to look ahead. E.g, a business customer that is expanding might become more profitable for you in the future. It’s important to anticipate changes and how they might affect different customers. It may not be worth focusing any effort on customers who generate low sales and low profits.

Methods for selling more to your best customers

You can try the following ways to sell more to your best customers:

  • Up-selling — selling them premium products with higher profit margins.
  • Cross-selling — offering complementary products to those already sold.
  • Diversifying — identifying a need and developing new products/services to meet them.

If you already have some clients, it can be beneficial to find the most common characteristics across the most profitable of these. You can start to create a picture of who your ideal customer is.

Important ways to identify these profitable customers

The following is a list of some of the most important ways to identify your most profitable customers—those that drive value and don’t detract at the same time.

  • Continuously analyze your client data

You should get to know your ten best customers as soon as possible. Perform an analysis of your customer base, and find out who is providing you with the most profits. Once this discovery is made, it is important you don’t become complacent. By continually focusing on the same ten customers, you may miss the point where they lose profitability and a new yen emerges. Therefore, it is important to continuously reassess your customer base. That way, you can have an up-to-date ‘A list’ of clients!

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  • Don’t spend time chasing the wrong potentials

It makes sense for small companies to chase after the big accounts, in order to get big contracts with long duration. However, a company should analyze its numbers and find out where its real revenue is coming from. If the most profitable sector is indeed these large clients, then they should continue to be the target. However, in many cases, a larger number of smaller clients drives business and produces continuous revenue. Once identified, you can align your strategy to focus on these smaller clients, to maximize revenue. Of course, it can still be important to go after the big fish.

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  • Become familiar with customer life-cycles

Analyze your most valuable and profitable customers, to identify key profile and behaviour characteristics that are predictors for lifetime value. This way, you can identify at an early stage which clients are most important for you and you can align your strategy towards keeping these customers’ content. You can also start to target potentials which fit this identity so that they may also become valued clients.

  • Apply the 80/20 rule – a Pareto Analysis

According to “Living Life the 80/20 Way” by Richard Koch, the following are true:

  • 80% of your profits come from 20% of your customers.
  • 80% of your profits come from 20% of the time you spend.
  • 80% of your sales come from 20% of your products.
  • 80% of your sales is made by 20% of your sales staff.
  • 80% of your complaints come from 20% of your customers.

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This is the Pareto principle and is applied in a rule-of-thumb fashion. Many businesses can increase profitability dramatically by focusing on their most effective areas, and eliminating, or ignoring the less effective areas as appropriate. Profitability is a function of how much was expended to achieve profit, not just the revenue itself.

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Financial Services

CBN reveals framework for the N75 billion Youth Investment Fund

The Nigerian Youth Investment Fund will be funded through the NIRSAL MFB window of the CBN.



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The Central Bank of Nigeria (CBN) has revealed the implementation framework for the Nigerian Youth Investment Fund.

This was disclosed in a publication by the Development Finance Department under the auspices of the Central Bank of Nigeria.

The CBN stated that the Nigerian Youth Investment Fund (N-YIF) would be funded through NIRSAL MFB window, with an initial take-off seed capital of N12.5 billion.

READ: #EndSARS: FG creates new N25 billion Youth Fund, to increase to N75 billion in 3 years

The N-YIF aims to financially empower Nigerian youths to generate at least 500,000 jobs between 2020 and 2023.

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Objectives of the scheme:

  •  Improve access to finance for youths and youth-owned enterprises for national development.
  •  Generate much-needed employment opportunities to curb youth restiveness.
  •  Boost the managerial capacity of the youths, and develop their potentials to become the future large corporate organizations.

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What you should know
Recall that on the 22nd of July, 2020, the Federal Executive Council (FEC) approved the sum of N75 billion for the establishment of the Nigeria Youth Investment Fund for the period of 2020 – 2023.
The fund was created to support the innovative ideas, skills and talents of Nigerian youths, and to institutionally provide Nigerian youths with a special window for accessing much-needed funds, finances, business management skills and other inputs critical for sustainable enterprise development.
  • The fund targets young people between the ages of 18 and 35 years.
  • Beneficiaries of NMFB, TCF and AgSMEIS loans, and other government loan schemes that remain unpaid are also not eligible to participate.
  • Individuals (unregistered businesses) shall be determined based on activity/nature of projects subject to the maximum of N250,000.
  • Registered businesses (Business name, Limited Liability, Cooperative, Commodity Association) shall be determined by activity/nature of projects subject to the maximum of N3.0 million (including working capital).
  • The tenor of the intervention is for a Maximum of 5 years, depending on the nature of the business and the assets acquired, of which interest rate of not more than 5% under the intervention shall be charged annually.
  • The Federal Ministry of Youth and Sports Development (FMYSD) will collaborate with relevant stakeholders to identify potential training for training/mentoring.
  • The youths that are duly screened (and undergo the mandatory training where applicable) shall be advised to login to the portal provided by the NMFB to apply for the facility.

READ: CBN raises alarm over fraudulent loan offers, investment schemes with charged fees

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As a huge percentage of youths are engaged in the informal sector, the NYIF will facilitate the transition of informal enterprises owned by youths into the formal mainstream economy, where they can be supported comprehensively, build a bankable track record, and be accurately captured as active participants in economic development.

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Paystack partners Google to empower SMEs in Nigeria, Kenya, and South Africa

Paystack partners with Google to empower over 500,000 SMEs in Nigeria, Kenya, and South Africa.



Paystack partners with Google to Empower SMEs in Nigeria, Kenya, and South Africa

Tech startup, Paystack has disclosed that it partnered with Google to aid over 500,000 Small and Medium-sized enterprises (SMEs) in Nigeria, Kenya and South Africa.

This was revealed via its Twitter handle.

READ: Airtel is partnering Standard Chartered Bank as it expands its fintech business

Shola Akinlade, Founder of the company, stated that the partnership would enable the reliability of their work, “which would guarantee that all businesses paid via Paystack are thoroughly checked for legitimacy and credibility.

“In a low-trust environment like Nigeria, where many people are paying online for the first time, it’s important to deliver a safe, fraud-free experience, and this is a responsibility that Paystack takes extremely seriously.”

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READ: Nairametrics announces Strategic Data Partnership with Statista

Explore Data on the Nairametrics Research Website

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Why it matters: Paystack’s partnership with Google is to help SMEs to grow and digitise their businesses with new tools, financial support, and training. This would also help business communities in Nigeria, Kenya, and South Africa to rapidly grow.

What you should know: Google is an American multinational technology company that specializes in internet-related services and products.

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Nairametrics reported that the company had a partnership with Truecaller in 2018 to aid in the facilitation of online payments across Africa. The deal states that Paystack will use Truecaller’s database of verified phone numbers to authenticate payments for transactions executed on its platform.

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Buhari approves free business name registration for 250,000 SMEs

President Buhari has approved free business name registration with the CAC for 250,000 businesses across the nation.



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President Muhamadu Buhari has approved free business name registration with the Corporate Affairs Commission (CAC) for 250,000 businesses across the nation.

This was announced on Tuesday evening by the Media aide to the President, Bashir Ahmad.

READ: Nigerian firms risk delisting over failure to file annual returns – CAC

READ: CAC may reduce Business registration fee

READ: #EndSARS: Lagos State Judicial Panel has my full support – Buhari

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READ: SMEDAN to move 40 million informal businesses to formal sector, registers MSMEs

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“President Buhari has approved free business names’ registration for 250k MSMEs nationwide; according to the CAC, 6,606 names in each of the 34 states, Abuja will have 7,906, Lagos 9,084 & Kano 8,406,” he tweeted.

“The free registration commences today, visit for details” he added.

READ: #EndSARS: Access Bank announces N50 billion interest-free facility for businesses

READ: FIRS gives tax defaulters a 30-day ultimatum

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What you should know

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This comes after Nairametrics reported earlier this month that the CAC had announced it would begin registering companies within 48 hours, approve names the same day, and ensure 5-day completion for other post-incorporation services not available electronically.

READ: Where to invest your N5m to N500m safely and securely

READ: CAC delists over 40,000 dormant companies


Since the end of the #EndSARS protests, the Federal Government has been working on packages that are perceived as necessary for addressing the issues of large youth unemployment, which is viewed as a catalyst for the massive turnout during the protests.

READ: CAC to reduce business registration period to 6 hours

READ: Nigerians indifferent to lower CAC registration fee

The National Economic Council (NEC) has set up a committee to meet the needs and demands of Nigerian youths behind the #EndSARS protests. The head of the Committee is Vice President Yemi Osinbajo, with one of the frameworks being “A social security framework for the youths and Nigerians to deal with the problem of unemployment and poverty in the country.”

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The free business registration coming this period will help businesses that can’t afford the registration fee to get their business registered and timely.

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