It sounds counterintuitive, but many small- to mid-size businesses can achieve higher profits and more success by downsizing the base of customers they serve.
Creating the perfect situation in which you and your customer base share common goals, respect, and appreciation can alleviate personal and professional stress and allow your business to grow.
Read the rest of Part I here.
Strategies to Maximize Your Success
While most success in business results from identifying opportunities for profit, identifying customers who are potentially unprofitable is equally important. Of course, the easiest way to spot these customers is by focusing in on those who don’t pay their bills on time. This is a telltale sign that your efforts and service are not a priority.
You can also benefit from addressing the customers who require lots of handholding or demand constant changes, returns, rush orders, or allowances. Customers who cause constant headaches and take up more than their fair share of your time can either kill your profitability – or be priced into profitability. If a customer really needs the ability to make last-minute changes, returns, or rush orders, you can either charge him for those services or direct him toward a competitor you really dislike.
As an intuitive and effective professional, you need to:
- Understand the needs of your customers from their perspectives. If you approach new customers with an order book in hand, they won’t be as open to building lasting relationships, and they’ll probably give you more guarded answers about their expectations.
- Look beyond yourself and your company. Learn what your customers think about your market in general. By clearly communicating your company’s abilities and matching those with customers’ needs, you have a solid foundation.
- Ask your customers about their priorities. Try to push them beyond price comparisons. Inquire about their preferences in terms of ordering, tracking, and billing. When you really understand what they value most, you can provide products and services they’re willing to pay for.
Determining whether customers are helping or hurting your business is critical to your continued success. While it might seem counterintuitive to limit your customer base, this process can relieve the stress of problem customers, save your team valuable time, and boost your company’s profits. You will be devoting your time and efforts to the dedicated customers who respect your efforts and are happy to pay you for the value you deliver – a win-win for you both.
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Bio: Art Saxby is the founding principal of Chief Outsiders, the largest executive-level consulting firm that helps the CEOs of mid-size companies implement their visions of growth. His career started out in the defense industry, moving into corporate planning and strategy and eventually into marketing at Frito-Lay. He later continued his executive marketing development at Kellogg’s, Coca-Cola and Compaq Computers.