Most small businesses are so busy keeping up with day-to-day demands that they rarely have time to analyze anything. Analysis takes a ton of data, a lot of time, and often, the results are open for interpretation.
Analyzing your customer base, however, is time well spent. Understanding your customers’ needs today and how they might change in the future can help you plan for tomorrow. All customers are not equal, so understanding who your key accounts are today and who they are likely to be in the future will help you allocate resources where they are most needed. If your business is slowing down because of the economy, take the time now to get a better handle on what your customers are thinking.
Start by asking yourself the following questions:
· Which of today’s customers are most important to my business?
· How many active accounts are profitable on an annualized basis?
· For what proportion of your sales and profits do your best customers represent?
· Why do your customers choose you over a competitor?
· What has been the deal closer on new accounts?
· How many customers have you lost in the past year and why?
If nothing else, take a stab at the last question. It costs a business more to find new customers than it does to maintain existing accounts.