Observation, thoughts, and information.

Decrease Customer Volume for Stronger Growth


Some think the more customers, the better.  This isn’t necessarily true.  More customers doesn’t necessarily mean more revenue and bigger growth.  Decreasing your client list and/or customer base can have a dramatically positive impact on your long-term success.  In a recent Salesforce blog, MJ Gottlieb shares four benefits to take into consideration, related to this strategy.

They include:

  1. Increased loyalty:  When there is no loyalty there is no relationship and in business, relationships are everything.  We agree with this up to a certain extent.  Once a strong distribution, sales and customer service team is in place, the customer volume will follow suit.
  2. Increased longevity:  Oversaturation kills product longevity.  Keeping your product new and fresh is the key to maintaining a strong and loyal customer base.
  3. Increased brand value:  Scarcity and exclusivity creates product intrigue and increases brand integrity and brand value.
  4. Increased margins:  Bottom line, selective distribution secures your margins.  Oversaturated distribution destroys it.

Of course, this strategy doesn’t hold true for all business models.  This may seem like a tug of war between driving sales and maintaining happy, valued customers.  We believe the key is to constantly measure the variables in the marketing mix to determine the appropriate level and combination for strong, lasting growth.