Last year, I was having breakfast with a colleague at a restaurant that is near my office. I bumped into a handful of current/past clients and a few great prospects. Afterwards, I realized that I had really enjoyed spending time with people who valued my time and expertise.
Then, I went back to my office and looked at my calendar for the week. Unfortunately, I had too many appointments with individuals who were going to complain about their business, my fees and life in general. I asked myself the following types of questions – “Who would I rather spend time with? Who values my services the most? Who can I help get the best results? What type of client is the most profitable?”
The answers to these questions helped me to see that over the past several years I had spent a portion of my efforts targeting the wrong market. I had lost sight of the type of customer that was the best fit for my services. The result was that my business hadn’t grown as quickly as I desired and my margins were being squeezed.
If you’re like most small business owners you have on more than one occasion lost your way and spent too many resources trying to get the wrong person to buy from you. The reason you allowed this to happen is that you desperately want to be everything to everyone because you don’t want to miss out on any opportunities.
The problem with this approach (selling to everyone) is that you lose your focus on those customers that generate the most profit. Remember, you are in business to make a profit, not just to generate revenue. St Elmo’s could probably generate more revenue by reducing their prices and opening 10 stores throughout central Indiana, but what would that do to their profit?
You need to ask yourself the same questions I did last year and a few others to determine the best target market for your products and services. Here you go – Who likes buying from you? Who do you enjoy doing business with? Who doesn’t question your prices every other order? Which customers generate the most profit? Which customers provide you with the best referrals?
As soon as you have a crystal clear set of answers to these questions you then need to review your current marketing plan to see if you are targeting the right group of prospects. In addition, this exercise will probably reveal that you need to get rid of a handful of your current clients. (You can blame it on me if it will make the conversation easier.)
There you go – a simple exercise for helping you refocus your marketing efforts. As with most things in life, the solution is simple. All you need to do is choose to execute. Choose wisely.