Where Does Your Money Come From?

By: Dan Kennedy on: October 28th, 2010 4 Comments

I talk a lot about analyzing your business, to determine who amongst your clientele is supporting you in style, who is an anchor around your neck. Figure out how to get more of the former, less of the latter.

Who’s in the ‘A’ group? Where did they come from? How were they developed?

These questions’ answers lead to better external marketing.

Re-assessing which customers you spend money on, craft offers for, reward, recognize and nurture improves internal marketing and bottom-line profits.

One of my Wealth Group Members went home after a meeting once and did the painstaking, time-consuming analysis – and discovered that 97% of their profits come from the top 50% of their customers, only 3% comes from the bottom 50%.

The response is regrettably not as simple as just shooting everybody in the bottom half of the class. Presumably there is movement from bottom 50% to top 50%, and now that must be found, figured out, analyzed. What predicts those who move up vs. those who never move up? But clearly, it is a shocking and potentially valuable piece of information.

Gold/VIP Member John Davis has done and does a lot of work on this, and uses the information intelligently in both internal and external marketing. I know certain things as fact about my customer value based on source, and have used that over the years in relationship to both internal and external marketing. And some of what I do you may or may not ever be aware of, depending on what segment of the group you are in.

We laugh at – and should fear – the ignorance of the vast majority of people. If you ask a retired senior where his Social Security and Medicare comes from, you have about a 1-3 shot of getting “from the government” as an answer, and another 1-3 shot of “from all the money I paid in.” 2 out of 3 are wrong and ignorant.

Ask workers where their paychecks come from; the odds of hearing “from the customers who buy our products” is about 80-1. No, most people are clueless about where their money comes from.

And that should not be shocking. There is no required course in high school or college that spells out where money comes from. Most parents can’t teach it because they don’t know themselves.

But what is more shocking is how many business owners do not know where their money comes from!

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    ABOUT THE AUTHOR:

    Dan Kennedy is internationally recognized as the 'Millionaire Maker,' helping people in just about every category of business turn their ideas into fortunes. Dan's "No B.S." approach is refreshing amidst a world of small business marketing hype and enriches those who act on his advice. For more money-making marketing tips, tactics and strategies, go to www.GKIC.com

    4 Responses

    1. Scott says:

      Ha! many members of my BNI refuse to fill out Closed Business Slips because they do not know where their money is coming from. or their referrals for that matter. Much whining about all the time it would take, too busy watching Dancing With The Stars.

    2. A hidden benefit of doing this and clearing the junk out of your closet like this is that even if you lose a few bucks initially from “firing” the bottom half… you’ll be 10x happier, and you’ll most likely start attracting the clients you really do want.

      Or… you can do this simply to start marketing more to the top 50, 30, 20, 10% of your customers… which we all know are the REAL goldmine in any business :)

      Jeremy Reeves

    3. There are some fascinating points in time in this article however I don’t know if I see all of them center to heart. There is some validity but I will take maintain opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as nicely

    4. source says:

      This website has got a lot of very useful info on it. Thank you for informing me.

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