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Brandirect Home > Our Voice > Archived Articles > Seek to Maximize Your "Share of Customer," Not Market Share - 2003-08-06

Seek to Maximize Your "Share of Customer," Not Market Share - 2003-08-06

be Lincoln once said, "... you can't please all of the people all of the time." We believe he was right. If you try to make everyone your customer, you're in for a rough ride. In fact, choosing the right customers (and avoiding the rest) is essential to building a profitable business.

Enterprise Rent-A-Car became #1 by avoiding the frequent business traveler that was so coveted by Hertz and Avis. It chose instead to focus on the less frequent traveler who rents less frequently but keeps the car for longer each time. Serving this niche means processing fewer transactions and it allows Enterprise to put its locations at less expensive "off airport" locations, which allows Enterprise to keep its prices low.

With its most profitable customer in mind, Enterprise delivers value by doing things these customers appreciate, like picking them up. When it delivers value customized for this group, Enterprise earns the lion's share of its target customer's business. And once such profitable customers are loyal to Enterprise, it is harder for the competition to pry these valuable customers away. Enterprise doesn't want every person with a driver's license, but it wants 100% of its target market. By focusing on a specific customer segment and seeking to earn 100% share of these customers, Enterprise has built the most profitable business in its industry.

The New York Times maintains its industry leading 95% customer retention in much the same way. Instead of trying to be a paper for anyone who can read (and suffer the 40% churn that the rest of the industry endures), the Times focuses on the upper end of the market and does not try to please everyone. There are several things the Times must do operationally to make this model work, but the main point is that profit leaders focus on a niche and seek to own 100% of that business.

Brandirect can provide you with a strategic solution to maximize your share of your best customers. We'll keep them coming back again and again, spending more on your products and services, and telling their friends about your company.