Better Customer Engagement for Better Customers

Inbound Marketing Becoming Increasingly Attractive

Do you spend too much time advising unprofitable clients?


If 80% of your turnover comes from 20% of your customers, read this and you could be on your way to increasing your profitability.


The 80:20 rule – the Pareto Principle – states that for numerous events, approximately 80% of the effects come from 20% of the causes. 


With over two decades’ experience of working with financial services professionals, this rule has certainly proved to be accurate from my personal point of view. 


Sound familiar?


Do 20% of your clients complain the most? I can tell you from experience that when I hosted numerous expensive seminars with lavish food, fine coffee and cakes that the same could be said of the hecklers. They were the same 20% who hung around for the food and cake but gave little business! The same is broadly true of clients who are easy to deal with and write the most business.


Joseph Moses Juran suggested the principle and named it after Italian economist Vilfredo Pareto who, in 1906, observed that 80% of the land in Italy was owned by 20% of the population. He went on to develop the principle by observing that 20% of the pea pods in his garden contained 80% of the peas. Apparently he wasn’t too ha-pea about that. Groan.


What would it mean to your business if you could make some improvements?

Let’s look at an example:


An IFA practice has 500 clients with a turnover of £500,000 per annum.

Using the 80:20 rule, each customer in the 20% bracket is worth an average of £4,000 per year. The other 400 clients are worth an average of £250 per year. 

If you were this IFA, you would undoubtedly agree that it would be much more profitable if you could attract more clients worth £4,000 per year and disengage from some of the lower value clients.


Well, let me give you some good news. There is a method of attracting the type of clients you want to spend your time with. Inbound marketing can help maximise customer engagement.