Some customers are simply worth more than others

Beware: This is not just a story about grocery stores.

The top 10% of grocery store shoppers make 2.41 visits per week, and spend an average of $39.96 on each visit. They spend an average of $6,260 per year.

The bottom 10% of supermarket visitors make 0.18 visits per week—which equates to one visit every 30.2 days—and spend an average of $9.15 per visit… or $1,607 per year.

These are among the findings of a study by Concept Shopping, Inc., in a survey of more than 2 million shoppers. (Click here to see the story from Business Wire.)

Implications: If you think about it, the operational costs to a supermarket for serving an infrequent, low-spending customer are not much different than for serving a more frequent, big-spending one (either way, you have to keep the lights on and pay the staff). But obviously, the more “top ten” customers you can acquire, the more profitable you’ll be.

Isn't the same true for home improvement? Home electronics? Automotive? Banking? Jewelry? Health care? Yes… In virtually every business category, it would be fair to say that some consumers are worth more than others… because they are heavy users of that product or service.

As the economic recovery unfolds, it is quite likely that some consumers will recover faster and farther than others. Likewise, some companies will recover faster and farther than others. Because while some vendors settle for chasing simply, “new customers,” more strategic companies will focus on courting the heavy users of the product or service they sell.

If you focus on serving everyone, you focus on no one.

[Author’s note: Vilfredo Pareto, the Italian economist, suggested that “...a predictable imbalance exists, in which a minority of people control a majority of the wealth.” This later became known as the Pareto Principle, or the 80/20 Theory. There is probably a “predictable imbalance” in your industry or category, too. Can you identify the minority of customers that spend the majority in your category?]

Mike Anderson