Are There Any Niche Brands with Crazy Loyalty?
I mean, we hear about it all the time. There’s a pervasive story, a broad belief — dare I say an archetype — of the small, niche brand with the super-loyal customers.
It seems to be extra extra pervasive in the natural foods world. Not sure why. Maybe because health nuts are also supposed to be brand nuts?
But there’s a problem with the story: the data don’t back it up.
Does 80% of Your Revenue Really Come From 20% of Your Customers?
The latest batch comes from over 330 publicly-traded non-CPG firms, for both product & services, care of scholars Daniel McCarthy at Emory & Russell Winer at NYU.
Do they find an 80/20 pareto ratio of revenue? Not quite.
For non-subscription firms, they find a 68/20 ratio on average. For subscription-type firms, the average is nearly 10% lower, at 59/20.