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Who Are Your Best Customers?

The profitable ones, of course.

This story appears in the March 2001 issue of Entrepreneurs Start-Ups magazine.

In a typical business, 20 percent of the customers are unprofitable. Worse yet, says marketing veteran Gloria Berthold, founder and president of Outsource Marketing Associatesin Elk Ridge, Maryland, they cause 80 percent of your headaches.

If Berthold is right, you'd be wise to dump one of every five customers. (If you have a retail business, however, think twice before acting on that advice.) Berthold further posits that another 20 percent of customers account for 80 percent of profits.

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