#16 - Discover your least valuable customers

And grow smart

Author

Nathalia Montenegro
July 01, 2023

Hey there! Here's a thought: lots of businesses make the mistake of thinking that everyone who buys from them is equally valuable. Do you think that too?

Well, if you do, I'm sorry to disappoint, but that is not quite true. Bear with me!

When you understand that different customers mean different things for your business, you're able to think in a smarter way.

For example, you can segment your customers by classifying them into different groups, so you can create more value for the people who are the MOST valuable to your business, increase your revenue, and stress less.

On the other hand, it also allows you to stop trying to please everyone. As important as it is to know who your most valuable customers are, it is also important to know who your least valuable ones are.

Being aware of that helps you power up your business strategy by focusing on the groups that will bring the most value back to your business and therefore love your brand.

Changing how you see your business changes everything.

Who is your least valuable customer?

How does this question help you?

  1. Focus on the customers who bring the most value to your business, and stop trying to please everyone.

  2. Optimize your pricing to get the profit margin you want.

  3. Refine your knowledge of your customer segmentation and use your marketing efforts more effectively.

Let’s discover your answer by breaking down the question:

Part 1: "Who … customer".

  • When I say "customer," I mean both the people who are already buying from you and those who could be.

  • I'm guessing that all kinds of people have become customers of yours over time, but can you easily tell the difference between them?

  • Your least valuable customer isn't just some random person who interacts with your business.

  • Value can mean different things, such as how much they spend, how often they buy, their potential for additional sales, or even their influence over other customers. To accurately identify this group, you'll need to delve into your customer data and search for patterns.

Part 2: "Is your least valuable"

  • So, when you hear "the least valuable customer," do you immediately think of the customers who bought the least from you? If that's the case, let me steer you in a different direction.

  • Your least valuable customer has probably bought from you a few times already, but they're often a headache and not always pleased with what you offer. They think your prices are too high, and they don't see the value your brand provides beyond the "thing" that they get. It's too expensive to acquire these customers, and they require a lot of attention and resources to serve.

  • Now, when you identify these customers, try to think about their behaviours and characteristics as a group. Now you know who you DON'T want to attract to your brand.

  • You can use this information to compare with your "most valuable customer," the ones who have bought the most from you and were the happiest. Notice the differences in their characteristics.

  • Armed with this knowledge, you can define your segmentation, strengthen your marketing focus, and grow towards the people who matter the most for your brand.

So, the real question we're trying to answer here is:

Who are the customers that slows your business down when you consider things like profitability, resource usage, and potential for growth?

Now, it’s your turn…

Action step

👉 Set aside 20 min to work on your version of this prompt to get the clarity you need to set your business for authentic growth.

Who are your least valuable customers?

Week Recap

I shared this week on instagram:

Warmly,

Nathalia Montenegro

P.S : Ready to find out exactly what you need to do next to grow your business?

Here's how I can help:

PS2: New here? Read the previous issues of this newsletter here.

#16