Strategies to improve sales and profitability

Target your most profitable customers


Targeting your most profitable customers is a common strategy for increasing sales revenue. Some customers will contribute more to your profit margin than others. The key is to identify those customers early and adapt your sales strategy accordingly. For example, you may want to:

  • set higher sales targets for your best customers
  • find similar products or services to sell them
  • find similar customers to sell to

Identify your most profitable customers

You can use different measurements to identify your business' most profitable customers. For example, you can analyse your previous sales to find out who they are. Take note of what they buy, and when they buy it.

You can then segment your customers and the products or services they buy into one of four categories:

  • high sales and high profit
  • high sales and low profit
  • low sales and high profit
  • low sales and low profit

It's a good idea to focus on customers that provide high sales and high profit. However, customers that provide high profit on low sales can also help boost profits.

If customers are providing low profit from high sales, you should think about adjusting the price of your product or service to see if you can generate more revenue from these sales.

It may not be worth focusing any efforts on customers who generate low sales and low profits.

Methods for selling more to your best customers

You can try the following ways to sell more to your best customers:

  • up-selling - selling them premium products with higher profit margins
  • cross-selling - offering complementary products to those already sold
  • diversifying - identifying a need and developing new products/services to meet them

Find new profitable customers

You can try to expand your customer base by targeting new customers who fit a similar profile to your existing best customers. Use market research and market reports to gain knowledge about your marketplace, your customers and their behaviour to target them better.