It’s hard to build the right kind of business with the wrong clientele.
Maybe you’re like many salespeople I know who are unhappy with their present client base, but who don’t know how to change the situation. They’d like to upgrade, but they’re not sure what upgrading means for them. They’d like clients who are more profitable to serve, but they’re not sure what kind of clients that would be. They want to attract steadier clients but they don’t know how to go about it.
First, you have to decide what kind of clients you want to serve. The most productive way to do that is to draw up an ideal client profile.
Most salespeople have a vague idea of the kinds of clientele they want to build. They’ll say jokingly, but half-seriously, “We want clients who have lots of money, make few demands, and always pay on time!” At least that’s a start, but it’s not quite adequate for today’s highly complex and competitive professional world.
You’d want to be able to quantify and qualify your clientele so you can:
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- Set realistic marketing goals.
- Provide a base for evaluating your present clients.
- Make intelligent decisions about what types of clients to concentrate your energies and resources on cultivating.
One of the best ways to get that information is to draw up an ideal client profile — a word picture of the most desirable clients you could have. Of course, there may be several different types of clients you’d want to cultivate so, depending on your business, it might be a good idea to draw up a profile on each type.
A good ideal client profile doesn’t have to be complicated. In fact, the simpler it is, the easier it will be to work with. But it should contain several important elements:
(1) It should spell out demographic factors about the clients themselves. For example, if you’re serving individuals, you might want to list ideal age, salary and educational level ranges. You might want to include minimum credit ratings and other information that is pertinent to your business. If you’re working with businesses or other organizations, you might want to spell out the sizes and types you consider ideal, the types of decision-making processes you are most comfortable working with, and the minimal financial criteria you want to work with. In short, you list all the factors about clients you consider important.
(2) The second area to include in your ideal customer profile is how clients fit into your organization. What level and types of services do they require, how well equipped are you to provide that level of service, and how profitable can you be in servicing them? There might be some clients who are ideal in the sense that they have plenty of money, but their demands might be so great that you’ll go broke trying to serve them. Set some internal criteria to help you determine how desirable clients are from your perspective.
(3) And the third area to consider is the reality of the marketplace. How many of the ideal clients are available in your targeted market? Is that a broad enough base to keep marketing from becoming an impossible chore? What competition do you have for the market universe? If there either are not enough potential clients or too many competitors, you might have to scale down your ideals.
By taking all three of those factors into account — client desirability, your organization’s strengths and limits, and marketplace realities — you can come up with a balanced picture of the best types of clients to target.
The important thing is that you have some tangible basis for deciding which clients are best for your company.
Once you have a clear picture of what kinds of clients you are shooting for, you can then begin to evaluate your present clientele.
All of us have clients from time to time that we don’t feel very good about. Maybe we can’t put a finger on exactly why, but there’s something about them that says they’re not the kinds of people we want to be working with. Interestingly, those can sometimes be rather profitable clients.
On the other hand, we may like certain clients and enjoy working with them. But, on closer examination, we may find that they are not very profitable for us — for a variety of reasons.
One of the biggest traps you can fall into is putting too much emphasis on a few big-spender clients, and neglecting smaller clients. That can be disastrous for several reasons:
(1) If, for example, one client accounts for a fourth of your business, you are very vulnerable. That client may drop your services, and leave you with one-fourth less total volume.
(2) If you don’t really run a tight ship, a few big clients can eat up a disproportionate share of time and other resources. As a professional, you may feel that you’ve got to keep the big spender satisfied. But, as a businessperson, you know it’s eating up your profits.
(3) Landing a few big clients can create a false sense of security. You might find yourself cutting them more slack than you would smaller clients. Or you might take greater risks with them.
To avoid falling into those common traps, many successful professionals maintain a client rating system. They set certain clear, data-based, criteria against which they constantly measure the desirability of all their clients.
A client rating system can enable you to measure just how desirable any client is at any given moment. It can be as simple as you like, or you can make it as sophisticated as you need it to be.
A good client rating system will classify clients according to a scale you devise. Some professionals like to rate clients on A,B,C, and D levels. Others work by rating them on a scale of 1-5 or 1-10. Either way works quite well.
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Nido Qubein is an active speaker and consultant addressing more than 100 business and professional groups around the world each year. He is the recipient of the highest awards given for professional speaking including the Cavett and the Motivational Speakers Hall of Fame. Nido has also written numerous books and recorded scores of audio and video learning programs. For more information visit www.nidoqubein.com.