In business it seems that every time you turn around, you’re inundated with more information and innovative ideas that you hadn’t considered and feel the need to address for the future success and scalability of your business.
Oddly enough, many business leaders are surprised to find out who their clients and prospects really are when they take the time to reflect on them. Leaders and their teams often make major broad sweeping assumptions about their client base or target audience that can significantly impact their profitability and even their long-term survival.
Not knowing who your ideal audience is affects your planning, service delivery, hiring choices, pricing and your marketing focus. Some companies operate under the assumption that everyone is a potential client and that if they can just manage to capture a certain sliver of that market, they’ll be on the road to positive profitable growth. You may have run into that kind of thinking that suggests: “It’s a $5 Billion market. If we can just capture 2 percent of that market, we will be successful and profitable!”
The harsh reality is that not everyone is your ideal potential client; the key word being “ideal.”
Some “potential” clients simply won’t want to pay the price you ask. It doesn’t matter how good your product or service is; these clients are price shoppers. No amount of information or perceived added value will convince them to pay the market rate that you need to successfully grow your business.
Some “prospects” may need more (or less) than your product or service delivers. You can negotiate price to win the business, but you’re unlikely to come to an agreement. Even if you do, it’s unlikely to be an ongoing relationship. If your pricing is too low, you can’t deliver what the client needs and he or she will eventually dump you. If you offer more than what your client needs in higher pricing or add-on products and services, he or she will eventually decide the price isn’t worth it if what you provide doesn’t have enough perceived value for them.
It’s simply a matter of being a good fit for one another. So how can you determine that? One of my clients (a professional marketing services company) creates specific “personas” for potential clients. These personas are much more than simple demographic information (size of the company, annual revenues, etc.). A persona digs into questions such as: What are the specific problems, issues, or questions that the prospect faces? Then they ask: How can we solve those problems, address those issues, or answer those questions?
If it’s not a good fit within their core competencies or product offering, they don’t pursue that “prospect” because they really aren’t a prospect at all. It’s a waste of time and resources for both parties that will create a short-term nonsymbiotic relationship destined to fail. If we think back we can all remember having short term relationships that kill time, money, profit and even company moral – yeah that’s a big one the wrong client relationships can cost you your top talent!
When you do your annual or quarterly planning, make sure you have a clear idea of your specific core strengths and abilities. Then as you map out your strategy for reaching clients, make sure you accurately identify your ideal clients—those companies or individuals who you can truly help, and who will be willing to pay a fair price for your goods or services. Make sure the opportunities you pursue are real opportunities, and not just wishful thinking to solve a short term cashflow problem or sales goal. Not everyone is your potential client. Pursue the prospects that are a good fit for what you do best. This simple business strategy will strengthen your bottom line, customer relationships and even team morale!