Finding the core of your business is critical to its success. The truth is that there is a small core of your business and customers that really drive most of your business. What really matters is to identify that “core” and then identify with it and target it.
What marketers are starting to discover is that the target universe is smaller than originally thought. So small, in fact, that 4% of a brand’s consumer base is driving most of the business. This deeper dive into audience targeting is what I call the 4% Factor. Simply stated, it is another level down from the typical 80/20 rule of prioritizing (80% drive, 20% of the business) because, well, everything is getting smaller.
Scott Morgan explains its use this way:
The 4% Factor goes well beyond a loyalty strategy — it is a penetration strategy — designed as a competitive approach to protecting and growing your business. Simply put, start smaller to get bigger faster. It also tends to be a much more sustainable approach than traditional strategies of casting a really wide net, going through trial and then hoping to retain a percentage of new customers.