News

John Lewis’ Chairman Advises Retail to Focus on Core 20% of Customers

March 14th, 2012 in News

Charlie Mayfield, Chairman of John Lewis Partnership, parent company of the UK’s premier department store group advises retailers to focus on the core 20% of customers who deliver 80% of revenues.

The 80:20 ratio is something of a ‘golden rule’ in retail and has been found to hold good in many if not all transactional conditions, whether B2B or B2C.  Millward Associates has been identifying this core percentage of most-profitable customers for our shopping centre clients for almost 10 years.  We call them ‘High Value’ customers and in a shopping centre context 80% of turnover is actually delivered by closer to 30% of visitors.  We answer the following vital questions:

  1. Who are the 30%?
  2. How do they differ from the total visitor profile?
  3. Where and how should we be marketing to them?
  4. What impact is focusing on High Value Customers having on our visitor profile and tenant sales performance through time?

A majority of John Lewis’ customer transactions are via plastic cards, so they know absolutely who all their customers are and how much they spend in a year.  Profiling them is a relatively straightforward task.

For shopping centres, finding the right answer is more complex because its not (yet) possible to understand who all your customers are.  Identifying High Value Customers requires considerable research skill and the necessary understanding of sampling methodology to be confident of identifying the right people.  The vast majority of exit survey designs will not deliver.  Millward Associates has almost a decade of experience of identifying the ‘core’ percentage of customers who deliver 80% of annual spending and we do so cost effectively.  Our clients reap the rewards of understanding who High Value Customers are, how they shop and what motivates them to spend more in our clients’ centres.

Call +44 (0) 7970 880348 or email Mark Millward today to find out more: mark@millwardassociates.com