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Choose your customers, don't let them choose you
A common complaint is that the business is attracting the 'wrong type' of customer. Most often they are smaller organisations than they'd like, spend less frequently and at lower levels than ideal, yet are highly demanding of management time. The reason for this situation is often self-evident. In the 'early days' the business was happy to accept custom from anyone willing to pay. Prices may have been discounted heavily to win early business and service levels altered to appeal to smaller than planned customers.
The situation may seem irreversible, but with the right approach to customer acquisition this need not be the case. Go back to square one and define what the ideal customer is like, in terms of size, industry, spend profile and so on. Then, with help if necessary, define the correct mix of marketing tactics that will specifically attract those customers. You should look at pricing and service definitions as tools that can make you more appealing to this new target group. Then kick off a marketing programme with an adequate budget and clear criteria for success ... and stick to it.
Just say no
It may take time, but eventually the business will start attracting the 'right type' of customers which will dramatically affect profitability. However, there is always a strong temptation to continue to accept customers that don't really fit the defined criteria.
Fortune favours the brave. Saying no to these customers will free up management time to focus on acquiring the right profile of customer. Often the commodity that small businesses lack the most isn't budget, it's management time. Adding more of the 'wrong type' of customers is just a distraction that leads to lower profits in the long run. It's hard to say no, but sometimes it's the only way to success.
Memorable marketing
Thinking and working creatively like this will help you to make your marketing more memorable so that it better supports your business ambitions. This means that customers will be able to differentiate your products and services from those of your competitors and clearly see the value in buying from you.
If you would like some advice on finding the profitable customers for your own business, or you know someone at another business who might need help, then please contact us. The sooner you start, the sooner you will benefit.
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