Does it matter who your customers are? As long as there are plenty of people clamoring for your products or services, that’s got to be fantastic, right? Actually, the ideal customers are only those that best allow you or your company to meet its true objective.
True objective … that’s the key thing here. Let’s be honest; for some (or most), the number one goal is making money. For others, charities for instance, the goal may be to improve people’s lives. A few others may want to educate or increase public awareness of important issues. Whatever the objective, the idea is to maximize the frequency and quantity of its attainment with the least possible expenditure of resources. And as we all come to realize at a certain point, some customers are just not worth the effort to keep.
It’s a matter or opportunity cost. The time/effort/money that you devote for one client represents time/effort/money that you could not provide to another. It’s ROI: some customers are going to be better investments than others. Of course, the tricky part is making sure you actually have a more profitable client waiting in the wings if you begin doubting the worth of the customer you do have. After all, the customer who provides some profitable reward for your work is better than not having any reward at all. You will want to identify who your “best” customers are and then steadily transition your client base to one more closely resembling the ideal client profile.
So what makes a good client? In general, here are three key characteristics:
- They will truly benefit from your products or services. While this may seem obvious, many business owners take the attitude of “If they’re buying, we’re selling!” The problem with this approach is that the customer can’t ever be satisfied. You’ll expend a lot of resources trying to make them happy (with a square peg for a round hole) before you or they give just give up. Then you get to live with them sharing their negative assessments of your organization to anyone who will listen.
- They won’t require exceptions to your rules. Understand, we’re not talking about value-added service, or going the extra mile to make a customer happy. Those are business differentiators that promote customer loyalty and deliver great word-of-mouth advertising. Rather, what you must avoid is agreeing to provide a level of service to one client that you offer to no one else (i.e. outside your normal service area, hours of business, billing process … etc.). The increase in gross income probably won’t adequately compensate for the disruption to established procedures or morale.
- They represent the opportunity for repeat business. It’s always more profitable to serve existing customers than try to get news ones. Therefore, target your marketing to prospects who will stay with you for years rather than those who are more apt to be “one and done.”
The bottom line is that you want customers who make you feel good about what you do; clients who let you work with a spring in your step rather than beating you up over every penny’s worth of service. So, how do you get more of the good ones, and fewer of the less desirable sort? That’s where the profile comes in. The good news is that you’re already familiar with it.
Simply take some time to review your current and former client lists. Or if you focus on retail customers who come and go without a lot of personal interaction, sit down with employees who deal with them on a daily basis. Start identifying those that meet the criteria of a good customer as listed above – those that fit culturally with the work you want to do and are profitable. What demographic characteristics do they have in common? Are they mostly from a particular industry or similar industries? Are they of a certain size or business maturity? Are they driven to your business by a common need that other, less desirable customers don’t seem to share as much? Write down everything you come up with. That will be the profile you want!
Once you have an idea of what your ideal client is like, then you can start building marketing campaigns that target those individuals specifically. Over time, you should find you that you’ve successfully negotiated the “out-with-the-bad, in-with-the-good” maneuver.