The 80/20 Rule needs to be applied to your customers. Why? Because if 20% of your customers are responsible for 80% of your revenue, you need to spend less money, time, and effort on acquiring new customers that aren’t your best customers. This is a game-changer!
A Kansas City Personal Injury Law Firm had never really analyzed their caseload. They only knew that, on average, a case was worth $8,000 in legal fees.
After analyzing the data for the 20% of cases making 80% of the revenue, the firm was able to identify 1) the geographic regions where these cases came from, 2) the demographics of the injured parties, 3) the type of accident that caused the injuries, and 4) the nature of the injuries the clients had sustained.
Next, the firm compared this information with what could be gleaned from the remaining 80% of cases that only made up 20% of the revenue. It was no shock that there were quite a few differences!
To keep the story short, the caseload grew from 165 cases to more than 650 in just three years, but even better than the growth was the fact that the average case value went from $8,000 to $11,000, a 35 percent improvement!
The moral of the story is: When you really know who your best customers are, you can focus your money, time and effort on getting more customers that are similar. This simply drives profits up; Less waste, better clients.