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Growth and Profitability from Outlier Customers

Red umbrella fly out from crowds of black umbrellas

When you deal with the same types of customers, buying the same products and using them the same way, every day, it’s easy to be lulled into a smug confidence that you know everything you need to know about how customer needs are evolving.

Market research and management reporting systems are notorious for “averaging” all customers together. This blends specific needs into a bland summary of general information. As a result, critical “outlier” information gets lost in the mix, and companies lose out on valuable insights about customer needs.

They focus product and service enhancements on the “average” customer, and as long as she’s pretty happy, they think they’re doing well.

This is dangerous.

When we ignore the unusual customers – the ones at the edges of the bell curve – we miss important market signals.

These “outlier” customers are those who do things a little differently.  They may use our product or service in an unusual way, perhaps even in a way that’s never occurred to us.

Why is this important?

Observing how outlier customers use our products gives us a window into things to come.

These rare customers can clue us into emerging market trends.

A company I know noticed that a few of its customers frequently asked for rush shipments.

The shipping department thought of these customers as a nuisance. One employee even admitted that she hesitated to pick up the phone when she saw their numbers on caller ID.

One day a curious employee decided to look into this phenomenon.

She struck up a conversation with these demanding customers, especially those who at times seemed willing to pay almost any price to get product overnight.

What she learned astonished her coworkers. These customers were modifying the products and then reselling them at a high price to overseas customers. This revelation sparked a flurry of creative thinking.

The company set up a special process for no-hassle rush shipments. Soon, the company found other, similar customers, and these highly profitable sales took off, fueling growth for years to come.

Unusual customers are often our most profitable customers – so find more like them!  <– Click to Tweet

To spot outlier customers, look for those who:

  • Use your product in an unusual way, or under extreme conditions.
  • Seem to get unusual value from your product or service (often, but not always, indicated by higher margins).
  • Have gone to extra trouble to acquire your product, or have surmounted an obstacle to using it.
  • Care a lot about a product characteristic that your company doesn’t consider important.
  • Need much less or much more service and attention than average.
  • Are achieving fast growth.
  • Are struggling or losing market share (especially if your product may be able to help).
  • Operate in a particularly risky or fast-changing industry.
  • Modify or combine your product with another, or use only a part of your product.
  • Add value to your product and resell it.
  • Are using your product in a geography or market that your sales channel does not serve.
  • Are particularly innovative and forward thinking, or are trendsetters.

Taking a closer look at your outlier customers and their behaviors can reveal how your product or service can solve customer problems in ways you may not be aware of. Sometimes this is the small nudge you need to spot a new market opportunity.

How well does your company leverage insights from outlier customers to increase profitability?

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