Customers Are Always Right, Except When They Are Wrong

unhappy customer fed up

Wouldn’t it be great if every person in the world bought your product or service? All you have to do is create something that everyone wants, right?

I hate to break it to you, but you’ll never be able to create a product or service that pleases everyone. If you try, more likely than not, all you’ll be doing is setting yourself up for failure.

Download a bite sized cheat sheet of this post.

The 80/20 Rule aka The Pareto Principle

Have you heard of the 80/20 rule? It’s a saying that’s used heavily in the business world. It goes something like this:

80% of your sales come from 20% of your clients.

It can also mean 80% of your revenues come from 20% of your customers.

Now, granted, the 80/20 Rule is just a rule, so the percentages won’t always match exactly, but chances are they will be close.

Your takeaway: don’t waste your time trying to please the largest group of customers that are likely to be only producing a small fraction of your revenue.

The Crazy Egg Case Study

Don’t believe in the 80/20 rule yet? Well, here is what I learned the hard way…

When we first launched Crazy Egg we had 3 paid plans: $99 a month, $49 a month, and $19 a month. Within a few months, a lot of potential customers said that they would be happy it if we would add a $9 a month plan. So we just did it without thinking of the implications.

After a few years and thousands of customers, here is the breakdown of customers by plan:

  • 6% of our customers are on the $99 a month plan.
  • 10.4% of our customers are on the $49 a month plan.
  • 23.9% of our customers are on the $19 a month plan.
  • 59.7% of our customers are on the $9 a month plan.

Additionally, here is a break down of Crazy Egg’s percentage of revenue per plan:

  • 6% of our customers account for 28.6% of our revenue ($99 a month plan).
  • 10.4% of our customers account for 24.2% of our revenue ($49 a month plan).
  • 23.9% of our customers account for 21.6% of our revenue ($19 a month plan).
  • 59.7% of our customers account for 25.6% of our revenue ($9 a month plan).

Looking at the data from the top 3 plans, it turns out that 40.3% of our customers make up 74.4% of our revenue. Whereas, the $9 plan makes up 59.7% of our customers and only 25.6% of our revenue.

So in our case, the 80/20 rule was actually 75/40. Where 75% of our revenue is produced by 40% of our customers.

For example let’s say there are 100 customers and the total revenue is $10,000 per month. Then 40 customers would be on the higher plans, which produces $7500 and 60 customers are on the lowest plan bringing in $2500.

Although it seems like adding the $9 brings in an extra $2500, it actually probably wasn’t the best thing to do…..

We noticed once we added the $9 plan, we started getting more tech support requests. Customers who typically pay us $49 and $99 tend to have less questions and are usually more satisfied with our product. On the other hand, customers on the $9 plan tend to ask a more questions and generally aren’t as satisfied as the higher paying customers.


In hindsight it would have been better off for us to focus on that 40% of customers that bring in 75% of revenue. We could have done this by trying to understand more about this segment of our customers.

What types of companies do they represent? What is their job title? What do they all have in common? What makes them different than the 60% of customers on the $9 plan?

Going forward, our plan is to start understanding our most profitable customer segment(s) better in an effort to get more of these types of customers.

P.S. If you want help growing your business click here.

If you want to break through to real profits online, you need some serious firepower. For a limited time I’m sharing some select tips and tricks Amazon, Microsoft, NBC & Hewlett Packard paid thousands of dollars per hour for, FREE.
  • The step by step guide to monster traffic generation
  • The how-to guide for increasing conversions on your website
  • 7 Cashflow killers your analytics tools are hiding from you
100% privacy, I will never spam you!


  1. Very interesting post… great point about cheapest price clients and tech support. Thanx for real life examples! I will share it on one forum where I think people will appreciate it a lot!


    • Thanks Adrian, glad you found it useful. I like to give “real life examples” because they are the best to learn from.

      • This is a very educative post. Those kind of things are exactly what we need to read about. No those that are saying we have to write a business plan. This is what helps us to make more money. Thank you Neil for this great post.

  2. Fantastic posts! It goes along with a lot of freelancing sites talk about: raising your prices will get you fewer but more highly paid jobs.

    I’ll explain:

    If you’re doing 10 websites a month at £180 each, then you’re earning £1800 per month. Whereas if you do 2 websites a month at £1500 each, you’re earning £3000 per month. You’re getting a higher envelope filled with green at the same time as handling fewer, more appreciative (hopefully) clients.

    The £180 to £1500 jump was MASSIVE by the way, so it doesn’t always work that way. I’ve raised my minimum price to £400 for a very simple website and have since began to earn a lot more money.

    One of the reasons I’m writing this comment on a shiny new iMac ;).

    • lol… that’s pretty awesome to hear! Especially the iMac part, good for you. I bet the type of clients you get are also more high quality now too.

      • They really are. The quality of my work has also increased as a result, so it’s been a bit of a double-win for me!!!

        I’ve noticed that I’ve been getting more serious customers. I’m currently working on a hosting companies website, which will be released in January.

        By the way just a small note. I’m not receiving any of the emails that I’ve subscribed to on this site? It’s not in my spam, trash or inbox.

  3. Thoughtful and useful post! I realized through my experiences that most of the time the lowest price brings in more revenue. Good share Neil…

    • No problem. In my experience, high prices services or goods brings in the most revenue.

      I guess it varies from business to business.

    • That totally depends on what kind of customers you have. If you have more customers that bring small revenues than those that bring bigger revenues you need a cheaper offer.

  4. Nicely written post as always.

    You may also want to focus on $9 customer and find out what is stopping them to upgrade themselves, there can’t be anything better than to bring those 25% revenue generators into 75% category.

    • Up-selling is definitely a great idea, thanks for pointing that out ROW

      • Nathan J. Brauer :

        Also, do you have video tutorials?
        Stats show video tutorials increase new-customer sales (a LOT), upgrade sales, and reduce help support requests (also a LOT; as long as you provide a clean, intuitive interface to find and watch the videos).

        • I don’t, but it’s something to take into consideration, thanks for the input.

          • Nathan J. Brauer :

            No problem. Contact me when you’re searching to hire someone to create the videos. I may have some references for you and if you don’t use my references, I’d be interested in knowing who you hired (I’ll be hiring for video tutorials in the semi-near-future myself).

    • You need to have a good relationship with your clients in order to convince them to buy a more expensive product and you also need to make then understand they need a better product and not to feel that you just want to get more money from them.

      • You not only need to have good relationship, you need to give them something of value…and then resell them on why they need to upgrade.

  5. Most of the time people try the smaller plans to test out the products. So you may have the majority of people using the 9$ plan which does not make you much money, but generally people usually upgrade there accounts to add on more domains right?

    You may not make much money from the 9$ plans, but I bet you make good money when people upgrade there plans. I focus a lot of my attention on making return customers. If I were you I would keep the 9$ per month deal, but make it a trial… say 90 days for 9$ per month, and then from there you try to get the customer to upgrade.

    I personally want to use crazyegg on my e-com sites, but I dont want to spend 100$ a month to test the product, I want to spend 10$ per month to try a site, and if I like it I would upgrade. I am not satisfied that taking out the 9$ per month deal was a great idea, you will be loosing valuable return customers.

    • You are correct to some extent. For that reason we have a 30 day money back guarantee.

      But you are right, on our end, we need to do a better job convincing users to upgrade into higher plans.

      • Nathan J. Brauer :

        I’m kind of torn on this. While having a 30-day money back guarantee does improve conversions, I don’t think it’s as good as offering a lower priced solution mainly because people, more often than not, feel like these “guarantees” are rarely true to their word (thanks to the scammers out there). At the same time, having a lower rate increases customer care costs which distracts you from serving those who generate the most revenue.

        A few businesses have “solved” this by limiting support options to lower paying customers (ex: Google Analytics), though I don’t know how effective that is. Another idea is to offer the service completely free for 30 days, and if you continue to use it you’re billed for the first 30 days and the next month of service. Thanks to irresponsible companies and scam sites, that option is probably seen as scammy too. The variation on this would be to allow a completely free, no obligation (no CC# needed) trial (don’t know the numbers on this but I’d think it’s probably not very effective).

        An idea that I haven’t seen implemented yet is to have a lower priced plan, but limit it to X amount of months with no contract to continue. In other words, a paid trial. So, for example, your $9/mo plan would only be effective for 1-3 months. At the end, stats would still be collected but not displayed; if they choose to continue at the $19/mo (or more) rate, you’d reinstate their account. This would also be easy to see as scammy too though. In order to maintain a good reputation, it should be absolutely clear every time they use the service that the $9/mo plan is only a trial rate. Of course I haven’t done this myself; I’m just spewing thoughts and ideas to build upon 🙂

        Food for thought.

        • @Nathan: You have some very good ideas but the success of these ideas depends only on the targeted customers. If you have clients that are satisfied with $9 plan I don’t think the will be very anxious to pay more and you could loose some of them. If you are truly a good marketeer and you have the best product than you might be able to retain those customers. This is a scenario in which you can win or loose.

          • Yes… they must be first sold on the $9 being extremely helpful but not so helpful they don’t want anything more. Then after you give them enough value, it all depends on your sales job.

            • Nathan J. Brauer :

              Ya, I’m no stranger to those words. I used to be a direct sales manager/trainer.

              I just realized that some companies have done the idea I suggested. Mainly broadband and cable services (in the USA at least). It’s always promoted as “$24.95/mo for the first 3 months!”

  6. David Turnbull :

    I’m re-reading the 4HWW (the expanded edition) and it was nice to stumble across this post and see some real world examples of the Pareto principle. Interesting stuff.

    • Even though you really can’t have a 4-hour work week and make a lot of money, yes the 80/20 rule still applies (pareto principle)

  7. People actually love the post Neil, maybe you’d find some time and come share more of your insight there? It’s a great forum for entrepreneurs and here is the actual post about it, one guy had some great insight about how Clients are always right (still) BUT in their own minds! Which doesn’t mean they are right necessarily!


    • Thanks for the invite to your site Adrian, I’ll come check it out and see if there are people I can connect with and share ideas.

      • The forum is owned by MJ DeMarko, guy retired at 33 because of his internet projects and enjoys writing a book and driving Lambo! The forum members has been incredibly helpful and supportive for me with my own blog and upcoming site. I think you will find people you like on the forum, it would be awesome to have some of your input and knowledge there.


        • Wow… impressive. He’s been able to accomplish most people will never be able to do. That definitely sounds like a great spot to network with the right type of people.

  8. Neil,

    I understand that you are writing this piece primarily from a revenue perspective. However I think that there is an underlying theme here that needs to be addressed beyond just the 80/20 rule. I think that in nearly every industry you will find that the lower paying clients cause the most headache/heartache and generate incredibly low returns for what they offer.

    By sticking with your premium clients, not only will your revenues increase but so can your quality of service rendered to those clients. This will also in turn generate more high paying customers who expect less fringe work on your behalf and understand all the details moving forward.

    Good post though, just thought you might want to address the underlying human behavior aspect a bit more.

    • That’s exactly what my report has shown. It’s interesting how the human behavior factor plays a role in all of this. Thanks for sharing that article also.

  9. Andrew @ :

    Great post! What I learned is to do what you personally think is best and not to get carried away by what others are saying or suggesting because not everything they say is right. Thanks for sharing.

  10. Production Prints :

    Yea, picking up on what Row was saying, customers will routinely buy a $200 product from us and then 4 months later buy a $3000 product from us. Needless to say, if we hadn’t established the relationship with the customer the first time out, we may never have received the $3K order. But, yes you are right, if we boiled our numbers down, they would look similar to your breakdown. I guess I just look at the smaller orders as an investment for the future since it is 10 times more expensive to gain a new customer than an order from an existing customer. But that’s a whole other discussion 😉

    • Nathan J. Brauer :

      Interesting insight. We use the 80/20 rule as managers when we’re talking about sales reps (in other words: 80% of your sales come from 20% of your reps). It’s interesting hearing ideas from all different sides of sales.
      My past: sales reps
      Neil: subscription sales
      You: physical products

      I’d say that the “rule” applies quite differently in each area.

      • Production Prints :

        Yes, I’m sure you’ve heard the saying, “you can’t make a non-salesman sell, and you can’t stop a true salesman from selling”

        It’s also worth mentioning that one of our biggest clients that spends tens of thousands with us each year started out with their first order being $160 banner! You never know who’s behind those small orders…

      • The rule seems to apply in almost every aspect of the business world. Your version of how it’s used it definitely a very common one.

    • Upselling is a critical factor that anyone needs to setup with their current setups. That’s what you guys did… it was the perfect example.

  11. Chris Peterson :

    I have spent few years studying effective business practices and also in freelancer. We were trained that it’s always cheaper to retain a customer than it is to find a new customer. Goodwill is an important factor, and there has been many-a-time when I’ve spent over backwards to please an upset customer? The core customer care issue is simple: How far should you take “the customer is always right”?

    According to me when we spend lots of amount on advertising attract customers it seems like an unnatural act to fire them but sometimes it the right thing to do. Sometimes a “bad customer” is just not worth the trouble.

    • Nathan J. Brauer :

      I completely understand your last statement. The first time I was a sales manager, I hired a rep out of good faith. She didn’t have any experience but I gave her a shot at it. Worst hire ever, and arguably one of my worst decisions of my time in that career. I ended up spending so much time trying to help her that I didn’t have the energy or time that I needed to devote to my best reps (the 20% making the 80% of my income). On a more positive side: she was almost considered commission-only so I didn’t lose too much money outside of my rep’s and my lost opportunity.

      • right… that’s the perfect example… so you probably did loose money since you weren’t able to give your top people as much attention to help them grow as much as they could of.

    • That is true because an existing customer has less resistance than a new one. Take “customer is always right” as far as you feel comfortable with it. Sometimes, they do take you too far.

  12. Nathan J. Brauer :

    Neil, do you still live in Washington state? If not, where are you living now?

    • Yes, I’m in Seattle now… downtown area.

      • Nathan J. Brauer :

        I don’t remember why I asked that. I remember that I had a reason for asking that but don’t know what it was haha.

        I read, though, that Washington is among the top 5 “entrepreneur friendly” states. Would you agree? I have some family up there and have been considering as to where I will live in the near-future. Currently the top choices are: California (my home-state), Missouri (business relationships), Arkansas (family), Texas (one of the least taxed states) and Washington (also one of the least taxed states).

        • Well, Washington does have many entrepreneurs… Obviously I can not tell you where to go as it’s definitely a big life decision. Go where you’ll have the best opportunity.

  13. Brian Kevin Johnston :

    GREAT GREAT article.. with “Facts” I love it.. In the recruiting world I live in.. it is all about figuring out your “ideal client” You are unable to be everything to everybody…. I think Seth Godin once said… “You need to find the right somebody (customers)”

    Blessings to ALL this Holiday Season!


    • There is a “perfect client” out there and if you focus on it, you can start attracting the right client. It’s the bad and negative mindset we get now and again that brings out the negative customers.

  14. Neil still something is better then nothing, right?

  15. I find that many of my clients don’t have an understanding of their existing customer base yet they want to spend money acquiring new customers. They invest in advertising and promotions but can’t determine which activity drove sales. No analysis or basic tracking of where the customer is coming from but when you present a new strategy, the first question often asked is “what’s my ROI” 🙂

    • lol, yes, it’s undoubtedly interesting on how that works. People put themselves in a catch-22 type of scenario which binds their position and then ultimately kills their mindset. That usually begins the downfall of the company.

  16. I guess it all comes down to how much time you spend with customer support. Time is money. You are probably spending money on customer support reps. So when a customer is giving you a hard time you have to look at their budget. If they are a big budget client you then have to kiss their butt a bit to keep them on. But if they are small you def help them but if they get out of control it is a smarter choice to just let them go. This is what I feel.

    • The one’s that can afford to pay higher or premium prices are usually the ones who are more educated or knowledgeable than the others.

  17. Alexandra Spirer :

    Great post. In our business we always use the 80/20 rule.

    It is always better to focus on the base that you have and work to cultivate that, than to chase after more people when you could be making money from the ones that you already have.

  18. StocksonWallStreet :

    So end all focus on pleasing one not all.

  19. That’s really wonderful. It’s a reality that customers in the USD$9 asks a lot of question. Thats amazing, they ask many uqstions and they are the one who are more disatisfied. In the travel business, its the same. Clients looking for 5star hotels dont even ask a question while those booking 1 to 2 star hotel may bombard your email with questions.

  20. The Crazy Egg Case Study puts it in perspective. Also, if clients can’t afford to spend at least $19 a month for your services – they’re not clients in my opinion. It’s always the cheap Charlies that cost your business more than they bring in.

  21. nice post.. reinventing 80/20 rule…
    the customer rule applies good.. nice say that cheaper customer have more questions…
    the post mainly can help people with a larger customer base.. not small people like us..

    • Well it doesn’t matter how many customers you have… it allows you to structure your base the way it should to maximize profitability.

  22. Textbook Rental :

    yes, the math is not always 80/2o but the process is similar as you find that most of your problems come from a small group like the 9% group that you gave the smaller version too.

    The 80/20 rule helps you prioritize on what is important, focusing on the customers you want instead of the whining masses.

    • Exactly… it allows you to properly restructure your business and help it achieve it’s profit and goals at a much faster rate.

  23. It is true there are times you need to really look at the situation and say Mr customer your are wrong.

  24. Trevor Lohrbeer :

    Excellent post. A couple of years ago we were selling our desktop product for $995 and did a test where we dropped the price using a “limited offer” down to $595 to see if we’d get more volume. We got a little more, but not enough to justify the drop in revenue. We’ve since increased to $1,295 with almost no drop in volume.

    The lesson I learned out of the experience is that pricing versus volume can be modeled fairly easily: (old price / new price) – 1 indicates the increase in volume you need to make equivalent revenue . So if you drop your price by 50%, then you need to double your volume just to make the same amount of money.

    The formula works the same way for increasing your prices. If you increase your price by 33% and you expect your volume to drop less than 25%, it’s probably a good decision.

    Regarding upsells, the strategy of having a low price, essentially loss leader product, only works if a) it doesn’t significantly eat into your profit generating products and b) attracts customers with the correct profile that you have good confidence will buy more or upgrade. Anecdotal evidence can lead to mistaken conclusions.

    To use the example from a different comment, selling a loss leader at $200 for an upsell to $3,000 makes sense if you’re confident it happens regularly. Having it happen once or twice is not justification though. You have to make guesses and estimate out a model of how upsells will occur to know if it’s a good decision.

    As a simple example, if your main product is $500 and 20% of potential customers who would choose that product choose to buy your $200 product instead, but 10% of those customers will ultimately buy $3,000 worth, you can calculate the money lost and gained from having the $200 product: for every 100 customers, you lose $6,000 (20 customers x $300 because they chose the cheaper product) and gain $6,000 (2 customers x $3,000). Net result: while it might sound good, there is no net gain. But work on your upsell techniques and change the 10% to 20% or increase the upsell amount, and it may make sense.

    Again, though, it only works for customers with the right profile. Personally, I like to look at loss leader products not as an income stream, but as a sales and marketing expense, by comparing the money lost against the customer acquisition cost for that customer.

    • Wow, thanks for the detailed insight… I can see what you mean.. the type of setup obviously won’t apply to everyone in every scenario, but the slight shift will put you in the direction you’re looking to go toward.

  25. I agree. In order to provide qualitative support and contents, you have to filter your client base. Basically, real problem lies with your commitments. If you go with clear information and inform your customer explicitly that you are going to get these services in this package and these services in this, your ratio of unsatisfied clients will go down so you can earn more even with a low priced package as well because most of the people get started from the very basic package and our first step leads us to the next.
    As I read you, you are more interested in making connections so with a low priced package, I think you can get a database of quality prospects. As you are a serial entrepreneur :-), who knows that someday you’ll come up with some really exciting idea which requires less support and follow ups and yet profitable.


    • You really don’t know when your regular prospects become your high quality prospects… As you survey your current customers, you may discover that they are the ones that originally started trying you out with your free or low cost service… That’s why it’s it’s important to pay attention to your clients, but not giving them the full power to always be right.

  26. Neil,

    Thanks for a very thought provoking article. There is another very interesting thing about the 80/20 rule that applies to profits.

    It seems that the top 20% of your customers account for about 112 to 120% of your total net profit. The lower 80% of your customers actually cost you money in all the extra services that you provide, as mentioned in your article. So they bring you back down to the profit level that you actually experience (100%).

    The 80/20 rule has some amazing influences on business and how to make effective business decisions.

    Shallie Bey
    Smarter Small Business Blog

    • The 80/20 rule always seems to intrigue me… especially with how accurate it can be. Based on my results, it just comes to show you how much more time should be spent the specific level of clients.

  27. why its like this that the lowest price brings more revenue. I have also experienced this.

    • Well it actually doesn’t… in case, it really accounts for very little of the total revenue. Sometimes there are exceptions to the rules and stuff like that does happen.

  28. This 80/20 profit rule definitely happens in my business but also happens in my personal life.

    • It happens every where you can imagine…. the amount of money you make revolves around many rules, so its important to thoroughly understand them .

  29. Your opportunity cost is an unknown, Neil. If you didn’t have the $9 plan, how many people would not have signed up and how many people would have otherwise purchased the $19 plan.

    Fortunately, this could easily be known through an A/B pricing test.
    1. Test two website variations: with and without the $9 plan
    2. Measure your conversion rate to signup for each variation using Google Website Optimizer
    3. Calculate your revenue attributed to each variation to determine which delivers higher total revenue
    4. To make the best decision, you should track your upsell rate per variation over the next 3 months by tagging the users with their page source code and calculating an estimated LifeTime Value (LTV) of each signup level.

    That’s the type of testing we do for our clients.

    • Textbook Rental :


      yes “you will never know” is right, but I see alot of companies getting away from this now, The realize the “cheap Seats” cost almost 2x as much in support as the “Full versions” of the product. so if you want to cut your costs, stop offering free plans and focus on your tarket market.

      • Sometimes it is necessary, I don’t disagree with that, but for the most part, you will end up spending a lot more when you deal with these types of customers.

  30. This is really an interesting post Neil. I usually am easily sick with looking at numbers but yea I know they would play a vital role on any business.

  31. mma pound for pound :

    hmmmm…hey neil why my comment eraser?

  32. Textbook Rental :

    Thanks Neil,

    for having some quality control on comments.

  33. that sounds so intuitive. The only reason in my opinion to pursue these $9 customers is that they talk a lot and may be a source of more high paying customers. Just my experience.. dont know if it holds everywhere else. Btw.. how do you even break even at $9?? One tech request from these guys.. and bam.. you have almost spent that much money on these people.

  34. Thanks for the data on your customers. Really interesting how that decision impacted your customer base. I guess you really never know how that increased the lower cost service impacts the overall business until later analysis. Quite thought provoking.

    • Well most people forget to analyze their data… which ends up biting them in the butt in the long run.. you would surprised at what you’ll learn.

      • You need to constantly monitor your business and every data available in order to improve it. Not doing this will make you loose money in time.

        • Yes, you must analyze your business because if you don’t you’ll never how you can improve it. Ultimately, that is what will happen over time…. you’ll loose money.

  35. Free CNA Training :

    I live by the 80/20 rule. I have experienced it first hand, just like you have. I try to expand on the 20% that is successful – for example, if i discover 10 niches, 8 that fail and 2 that are a goldmine, instead of ooking for another 10 niches I find that it’s best to milk the 2 good niches I already found first.

  36. pregnancy symptoms ivf :

    Work on those that with higher opportunity rather than spending a lot of time on 10 mores…

    • If you have a successful business and you have many customers you can afford to choose them, but if you are just starting your business and you want to make yourself known you need every customer interested in your services.

      • Yes that is true, but just don’t go break your break trying to make everyone happy… it doesn’t work that way. You’ll end up burning yourself out. You can’t make everyone happy all the time, so focus on making some people happy more of time.

    • Yes, because you always get what you put your focus on. Instead of making more mistakes, focus on what you’ll do right.

  37. Neil:

    We are start-up company, we have built our customer portfolio 35+ within 9 months by providing custom website design services at very low cost solution and providing high quality service since we have retained all our customers. Overall we have come to the level where survival isn’t an issue and profit we are earning is about 20%.

    This year our plan is to reduce the pricing further and mention “100% Satisfaction Guaranteed” in the project agreement. In the 2nd quarter of this year, we want to give free Mock-up design to the prospects. Our model is simple “We can beat any price and guarantee satisfaction”

    • That’s fantastic!!! I think you guys are doing fantastic and you guys have definitely reached a very high level. Let me know if you need any advice or have any questions you need answered.

  38. The fact is that if you don’t really have a lot of customers, everyone counts after all…

    • Everyone does count…and yes you don’t need please everyone, just some. Pleasing everyone will just make you go in circles.

      • It is true that you can’t please them all no matter how much you try it, but those that are pleased will certainly stick with you. What I was trying to say is that until some point every customer counts.

        • Every customer counts, I agree, but what I’m saying is that you can’t cater toward EVERY single customers needs. 1 customers needs may contradict another ones etc.

  39. pareto principal is really very useful. One must highly concentrate on the 20% Population that is covering 80% of the business.

    Wonderful post.

  40. 80/20 rule is something new for me but when I think about it – this could be totally right! There is something that makes people coming back to same place for bigger and smaller shopping not only with everyday products but also these more sophisticated.

    • The 80/20 principle is good, but it’s also very general. So the idea is to understand it, but not completely rely on it.

  41. Yes, we have also experienced this first hand; the least profitable customers bring the most grief. Selling $10 bills for $8 will always generate plenty of demand. Trouble is you’ll end up going bust, yet loads of ‘sales’. Something about people wanting something for nothing 😉 If it’s to last it’s got to be win-win

    • Good example… yes ultimately it needs to be something where both party’s benefit. The customers who end up paying the least are unfortunately the ones who cause a majority of the problems.

  42. Nathan Sarlow :

    Nice post Neil – important to keep those things in perspective.
    I’m confused with the article title though – i was waiting for an article on ‘you’re the professional’ but instead it was more about prioritizing clients and fee structuring..?
    Was there a link in there that I missed?

    • Sorry about that.

      To summarize, the purpose of the article is that although customers can be right, what they are requesting from you can hurt the growth of your business. Granted they maybe happy and others may too if you listen to them, but it can still hurt the growth of your company.

  43. The more expensive plans probably have less tech inquiries because the clients know more what they’re doing and have the money for it. That Crazy Egg site looks really useful, got to have a look sometime.

    • I think you should 😉 Yes the people who spend a little more are usually a bit more well rounded in those aspects.

  44. Reminds me of the 4 Hour Workweek where Tim focuses his time on what brings in revenue. The other 80% of the time spent were on customers that brought in little revenue. He got rid of that base and had a lot more free time without losing out on his core customers who brought in the majority of income.

  45. sometime customers are annoying and despite that you need to consider that they are not. its amazing….

  46. Sandy Cormack :

    I did a Pareto Principle workshop for a group of entrepreneurs a couple of weeks ago. Although it was focused on eliminating time management, I had a slide on customer segmentation. There was a palpable uneasiness over the prospect of ‘firing customers’ but a few admitted they had to do just that in the past.

    I like to apply Pareto to business models. Think of Redbox in relation to Blockbuster. Redbox is like the 20% of the 20% of Blockbuster’s business model that makes the most difference. Just think if Blockbuster had put little blue and yellow boxes in front of every grocery, drug, and convenience store in town…

  47. Weight Lifting Training :

    80/20 talked about in rich dad poor dad. It at one point was 90/10.

  48. Business needs consistent attention and it is essential to maintain both supply and demand so you are able to find an equal ground. Interesting ideas. Thanks!

  49. Title of article is nice) but Pareto rule it’s something contradictory, on my mind! It can be interpreted in different ways and not always correctly

  50. I hate major companies they are always so wrong and they know it. Most major companies are ran but fools who dont know what the people want but think they know what the people want.

    • I agree that many companies are ran this way and obviously the reason why when they do fall… they fall hard.

  51. The arka teks lyrics :

    I hate so many of my customers. Some of them pay well while others who pay nothing and want it all.

    Neil i know you love me since im a link broker and i have to say some customers pay me well and want the basics while others will pay me 5$ for 3 months for a link and demand the world.

  52. ProbusinessGuy :

    I deal with alot of weridos online, i have delt with people who are far from the norm of what a typical IM is. They ask me wierd questions. They tell me about there personal life ect.

    Personaly its all worth it when i get paid then they can go back under the hole they were under.

    • lol yeah, but just focus on how you can help those weirdos out because they’ll bring friends and that will ultimately mean more for you.

  53. Halloween Costumes :

    I disagree. Not all costumers are always right.

  54. Web Design LA :

    I think Today’s world is customer oriented. You have to do as customer wants until and unless you are in monopoly business or strategy. Then only you can stay in market.

    • Yes, I agree with you… unless you have full control of a market, you really need to do what’s best for your customers. Repeat and referral business can be huge.

  55. Customers always looks for best product and service,until we get the positive points from them

    • Yes and that’s why when you have a product or service you’re trying to sell, you get other sites to give you reviews on it.

  56. You allowed us to look at the old saying quality over quantity paradigm in a different perspective. Thank You

Speak Your Mind