Marketing is an important part of business operations and expansion that require a proper assessment of strategies applied against specific customers. In building a brand name and relationships with customers, it is important for business owners to make evaluations regarding profitability and volumes of sales from different perspectives of customers. The outcomes of proper and strategic marketing are always positive and are designed to promote business or company growth. Some of the perspectives that marketing provides to a business include; customer education of the products being sold, business sustainability through sales, engagement of customers and it enables the business to grow. However, part of marketing strategies that often attracts debates regards identification of most profitable customers and focusing on them. From my point of view, I believe it is a logical assumption.
The fact that a business is able to identify and focus on specific groups of customers implies that it has outgrown the need to focus on a wide scope of customers who may not necessarily contribute positively to profits outcomes of the business. Ideally, the objective of marketing is to improve sales revenue by cutting down the cost of operations; and this can be achieved by appreciating that some customers contribution in the profit margins is higher than others.
An analysis of previous sales is imperative in making deterministic marketing decisions based on the input of customers in the sustainability of the business. In practice, it is beneficial to adjust marketing to focus on customers that provide high sales and high-profit margins as they are the sole essence of the existence of the business. In many occasions, businesses which operate with a backlog of lower profitable customers tend to incur expenses that are paid for by the best customers; practically they receive subsidies from the best customers. It is rather profitable to get rid of such customers by shifting the focus of marketing against them, as they cost the business money.
The concept of profitable customer, much as it may be subjective incorporates specific elements that are essential in the growth such as payments in time, high margins of products and services purchases, large order placement and lack of extensive after-sale services. These are some of the characteristics associated with profitable customers. Businesses which operated with customers that offer purchases of high margins of products and services tend to record significant amounts of profits as compared to customers who make insignificant purchases. Placement of high volumes of order and minimal requirements in after-sale services makes it extremely vital for business to offer special marketing treatment. Such may include provision of discounts and preference for credit purchases to build and improve on their loyalty which is fundamental for further growth of the business through increased profitability.
Additionally, businesses experience slumps periodically. In such time it relies on the loyalty of customers thus giving the best customers preference in marketing. Occasionally, best customers are associated with building a strong relationship with specific brands, investing in them through reduced prices of the products they consume can further help reduce the revenue spend on marketing as they can act as brand ambassadors by referring other customers to the business` products. Therefore, focusing on profitable customers is an important marketing strategy and it can be achieved by selling them products with higher profit margins, offering the customers complementary products to those already sold and up scaling the concept of product differentiation. The eventual outcome in the revenue of sales made from this group of customers is enough to keep the business floating contrary to the general opinion of having many customers.