I’m sure you have heard the saying that ‘20% of your consumers generate 80% of your profits’.  I think it ranks up there with the old adage ‘half of my advertising is wasted, just wish I knew what half’ as a ‘truth’ in the advertising world.

Best Buy believes in focusing on the more profitable consumers and a few years ago reorganized their stores and their marketing when they unveiled their Customer-Centric model, increased profits and finally owned the #1 market share position over Circuit City.

What Best Buy learned, and evolved to take advantage of, is that brands can attract relational consumers instead of transactional consumers if they want to.

Why should you care about relational v transactional consumers?  Well, as Seth Godin explains, some people are better than others.  Some consumers are more profitable.  Some consumers are better consumers.

What do you do about it?  How do you attract more relational and more importantly discourage the transactional? Quite simply focus on it. Change the Conversation. Develop an emotional connection so that price is 2nd fiddle to value.  Speak to the relational consumers - build the relationship with them one act at a time.

Most importantly stop appealing to the transactional consumers.  Discount offers.  Coupons.  This is like catnip to the transactional consumers.

If you don’t want them - and trust me, you don’t - then don’t put that bait on your hook.

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