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06/03/2008

The Definition Of An �A� Customer...Cash Or Barter

By Bob Meyer

It�s not unusual for 70 to 80 percent of a firm�s cash business to come from 10 to 20 percent of its customers�often referred to as �A� customers. Yet don�t confuse your �A� customers as being only cash customers.

What is an �A� customer for your firm? Each business needs to develop a specific profile of its best and most profitable customer. High volume is a major ranking criterion. But be prepared to downgrade the slow-paying big spender who consistently demands extra discounts and services.

Take another look at your customer base. How many A�s can you identify? Where are your potential A�s? What strategies can be developed to keep them coming to you? And what can you be doing to secure additional candidates?

This is more than a time-management exercise. It involves rethinking your overall strategic plan. A firm must keep asking itself which category of clients is most important for both short-term and long-term survival.

An ideal �A� customer is one who makes the most significant contributions to your bottomline. This is where your barter customers contribute heavily because their trade business is incremental business�extra business that can be the most profitable.

It�s often the frosting-on-the-cake, so to speak. Sometimes this customer receives a lower level of service because he or she is not demanding, and the business is considered �only trade.� Yet, when properly analyzed, their business may place them up there in the �A� category, because they contribute heavily to your bottomline profits.

A good marketing plan always looks forward. In addition to examining the direction your industry is taking, ask yourself, �What am I doing to incorporate the world�s fastest growing way-of-doing-business into my organization�s plans?�

A solid marketing plan identifies growth opportunities, as well as innovative techniques. Barter is a marketing, purchasing, and financing tool that offers you enormous profit opportunities. Your decisions should be driven by such present and future opportunities.

So bring your employees (or team members) together and see how close they can come to designing the perfect �A� customer. Write down all the criteria that is important to your company�s future.

Use your imagination to develop this mythical entity, and you will make some interesting discoveries. Plus you will develop a benchmark that allows you to see all your customers, whether cash or trade, in a new way. Then focus your marketing efforts where they will do the most good...stabilizing and increasing your customer base.


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