Sunday, October 17th, 2021

Ideal Client…. Discover Hidden Opportunities Yielding Higher Margins

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My margins have changed, I have more customers than before, but I am working harder and my accountant tells me my profit margins are down.  What shall I do, even my staff is beginning to view each new customer as a problem rather than an opportunity?  I sense that we are serving our clients well at great expense to our employees’ job satisfaction- this cannot continue without something cracking.  Maybe I should add people- but how can I do this when my profits are eroding?

There are many businesses that have done proper financial planning and gone through a review process and ended up with less clients and made more money. Much has been written about the value of keeping your clients and that the best source of new business is from your existing clients. Also, as business owners we know that to meet our growth goals we need to develop new business also. How do we maintain the balance of servicing our existing clients and grow our business in a cost effective manner?

It is time to review your customers and determine which ones are better and why.  This is best done by forming a task force of key people within your organization who regularly interact with the clients you serve.  There are two basic pieces of information this team needs to develop: the key characteristics of your best client relationships and how your business and the client arrived at this favored level of a business relationship. Once you complete this exercise, you will have identified the key characteristics that define your target ideal client and what were the key events that develop or grow this key client relationship and who is responsible for proactively performing this role in each step of your key client development process.

Here are some key steps you may take to develop your Ideal Client Development Process.  Once you complete this exercise you will discover that the marketing and sales process of developing the Ideal Client involves many or all of your staff performing a chain of events interdependent on each other in a proactive manner.  Your responsibility as an owner/manager/leader is to develop, lead, and manage this process.

Here are some key actions you may want to consider:

  1. Form a team of key people who know and interact with your current client base
  2. Assign individual team members with identifying from their point view the better clients and why they have   been identified as better or more Ideal Clients over others
  3. Have members share their identified Ideal clients and note their common characteristics: looking at such things as: volume of business, cost to serve, profit contribution and relationships.
  4. Once the list has been shared list the common traits found in your Ideal Client – you now have developed your target client.
  5. Now that the key clients have been identified go through each key client and list the key events and who was involved in their history that moved to them to Ideal Client status from their initial contact to the point of being Ideal
  6. Determine common events that occurred, give them a defined name and who was involved in this defined event and their responsibility

 

You now have a model to assign the authority and responsibility in your organization to proactively grow your Ideal Clients.  You will be best served to have someone facilitate this process.  Periodically you will need to review your clients again to monitor their progress and to determine the proactive actions needed to move them the next level.  You may also set up feedback systems with key indicators to quickly note your progress in acquiring and developing Ideal Clients.  Once the Ideal Client Model is implemented, you will have a more efficient and effective way of growing profitable sales.

To have a free discussion of this process email bclinton@business-wise.com and reference “Ideal Client Discussion”.

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