80% of your revenue comes from 20% of your customers. You’ve heard this before. Not only that, you’re probably pretty confident that you live by this adage every day, down to the letter.

However, your lead generation campaign may not be as on-target as you think when your 80% isn’t actually there.

Ever heard of the Rosetta Stone company? Chances are, you might have if you’ve been using its trademark language education software. But today, the company is now in the same, undesirable market position that it had pushed its previous competition when it was still a young company.

Before its products knew very well where its 80% was coming from but today it’s only realized that this same source has suddenly been consumed by upstarsts. As a result, its frantically trying to change its target market in order to stay relevant.

Like it or not, the 20% percent that’s generating your 80% is neither static nor one-dimensional. Increasing your focus on what you think that is could leave you for a nasty surprise when you realize that it doesn’t actually exist.

It’s like boldly ignoring the feedback of your new customers because you think your older customers are enough to maintain your revenue. You’re not just being overconfident here. You’re underestimating the kind of voice your seemingly ‘newbie’ customers are capable of.

  • They could be from a bigger industry – For example, suppose this new customer is actually from a larger industry that you’re just trying to put a foothold in. A similar case is already developing right now with the iWatch. Jonathan Ive believes that the new wearable would put Rolex out of business. However, the fight’s going to be a lot tougher than that. Getting loyal Apple customers to buy it is one thing but seizing a huge chunk of the luxury business could be another. If you were Apple, your 20% may not even put a dent into that target market.
  • They could be the ‘real’ 20% – It’s not often advisable to focus on generating new customers over nurturing current B2B relationships. However, it’s not always easy to tell if you’re really abiding by that rule. Your products could be hardwired to please old customers but frustrate newer generations of buyers. Yet after the dust has settled, you realized that your ‘best’ customers can’t keep your business from spiraling after all so you go after new ones! Consider this another reason why you should really pay attention to feedback, regardless of whether it’s from an old or new customer.
  • It could be flat even – And lastly, there’s always the possibility of 50/50 and not 80/20. Your total revenue/product is 50% new clients and 50% old clients. This leaves you with a need to have multiple buyer personas on hand and a careful assessment on what niche is really working versus what isn’t.

Think of it as another case of counting your chickens too early or putting all your eggs into one basket. Don’t be too confident about your most valuable customers unless you’ve actually proven them to be. Neither should you think your lead generation campaign can automatically focus on them oh-so-perfectly.

KSSF