20% of your customers will deliver 80% of your revenues
By Denis A. Baldwin

I'm one of those people who will scratch something that itches until it bleeds. It's a horrible habit when it comes to hygiene, but it's an absolute blessing when it comes to dealing with your market niche.

The "itch" in this case is the central focus of your marketing mix. Most product mixes can be defined with a bit of a bell curve. The middle and highest 20% is your target audience. Those are people who are qualified to purchase, in the market to purchase, are drawn to your product or products like it and have a continued interest in this product. As you stretch out from the crest of the bell, you get less likely buyers, dropping exponentially to those with no interest. As you drop further from this middle group of 20%, the chances of a purchase or re-purchase drops as well.

This 20% is your niche, and you need to cater to that niche. By targeting your efforts towards this class of buyer, you are not only spending your marketing dollars wisely, but you build direct relationships with these buyers who will continue to come back for your products and services.

There is, of course, a pendulum effect to this. Lets say you sell a specialty golf club that is perfect for men in their 40s with a stiff grip that are somewhere between 5'7 and 5'10 in height. These are your perfect customers, and your marketing picks off several of them at a time. This pushes your sales up and these men come back to buy more clubs and more accessories as they need them. But what happens if 5 foot tall 20 year old female golf prodigy finds you and uses your club and loves it? Do you devalue her as a customer just because she doesn't fit your niche? Absolutely not. You market to your niche while serving everyone else with the same vigor.

A customer is a customer is a customer, even if that customer is customary to your niche.