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HR strategyWorkplace Issues and Advice

Need to know: company’s key customers

by Jan Hills 13 Feb 2009
by Jan Hills 13 Feb 2009

Who are the key customers of the company as a whole? How much revenue are the top three customers contributing?

You will probably already know who your key customers are, but it’s essential to have an understanding of what their relative contribution is. Knowing how much revenue they are bringing in is a key business lever, since it tells you how important these customers are to the company. For example, if the top three make up 80% of revenue, they are a different size of lever than if they had made up only 20% or 30%.

It’s also useful to know whether those customers’ contributions are growing or decreasing, and which areas of the business they are bringing revenue to.

For instance, are there certain products that they buy, or do they buy across the board? Do they use numerous suppliers, or are they loyal to your company?

Another significant area of knowledge involves knowing who looks after those customers within the company. If retaining their business is a key element of your company’s success, then this knowledge will be vital for succession and talent management.

It is also important to stay aware of any strategies your competitors are implementing to try to move those customers away from you. You can then consider how this might affect staff motivation and the numbers of people who work on those accounts. Competitor strategy is, of course, sometimes hard to find out, but the more questions you ask, the more you are likely to discover.

At this time of economic uncertainty, it’s also useful to keep an eye on how well key customers are doing, because if they are becoming less profitable, then regardless of their loyalty, this could prevent them from buying in the same volumes. This is important in terms of whether the company scales up or down. You can’t, as an HR practitioner, act to retain that business, but you should set up plans so that you know how to react in terms of staffing and positive HR attitudes, should a key customer’s business shrink or fail.

The other element to consider is whether your customer’s business strategy is changing in a way that might affect yours. Keeping an eye on changes is vital if you want to be fully engaged with your company, so this is something you should talk to your line clients about on a regular basis. And you can also use resources such as newspapers and trade press.

Jan Hills, partner, Orion Partners

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Jan Hills

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