John Jantsch, small-business expert and author of “Duct Tape Marketing,” blogged this week on how to understand the persona of your ideal client or customer. You need to know their story, he argues, and then narrow your focus to better target them.
Narrow your market during a recession?
It makes good business sense, Jantsch writes on his blog, because “Once you start to get a better view of your profitable customers, it’s time to take a good, hard look at the other 70%.”
If your business caters to every client, then your best clients may not necessarily get the star treatment. You won’t have time to cultivate those relationships and make them bullet-proof. You won’t have time to go out and find customers who fit the perfect profile of a profitable customer.
Instead, you’ll be too busy putting out fires — the ones set by the other customers who share the same high-maintenance traits: They send endless emails and make unreasonable demands. They question charges more often. They argue for discounts. And, to top it off, they may even complain about the quality of work.
Let’s break it down:
- Are these customers going to give you referrals? Probably not.
- Will these customers talk you up online and out in the community? It’s doubtful.
- If you slowly culled them from your customer list, would you have time to attract those ideal, profitable customers? Definitely.
Now, you’ve got to go about firing your ‘bad’ customers with a level head and a
deft touch.
Ideally, you’ll want to move them politely to some other company, perhaps even a competitor. You can always say you’re swamped with work, but would be more than happy to recommend another company who will take good care of them.
“If you’ve taken the time to fire them politely with a bit more panache and patience, they’re likely to break less furniture as they leave,” blogs Steve Blank, serial entrepreneur and author of “The Four Steps to the Epiphany.”
But if you do it with an attitude that says, “You’re worthless and we’re thrilled to finally get rid of you,” the strategy will likely backfire.
Indeed the fallout can be painful. Complaint websites and good old-fashioned word-of-mouth can come back to bite you, hard.
The key is to be professional and offer alternatives. If you don’t, be prepared to face the consequences, urges Karl Walinskas, an expert on organizational communications and author of Getting Connected Through Exceptional Leadership.
“Discharging customers the wrong way can and usually does lead to very bad things for your business,” Walinskas writes on his website, businessknowhow.com. “Customers talk, and word of mouth about bad experiences travels fast and far.”
Before you start firing off a bunch of ‘kiss-off’ emails, create a checklist to identify your best and worst customers. Then create a see-ya-later script, compile a list of referrals ready to hand over, and start dialing.
P.S. – Fire your customers either on the phone or in person – but don’t wait until they call first, in dire need of your services. No one likes to be given the boot during a crisis. Not even the fire starters.
