By Dick Wooden on April 3, 2012 at 8:30 AM
You need better customers.
Also if you don't focus on ideal clients in your target market you might get someone you don't want. Just any parts and pieces can create a Frankenstein.
Many small businesses believe mass advertising through email marketing, billboards, radio/TV, direct mail and other channels alone will drive sales. They're wrong. That strategy often is ineffective and cost lots of money. This shotgun outbound marketing approach is not as smart as focused ideal client attraction with inbound marketing.
So how can you proactively reach new customers? First you must narrow your target market and identify your ideal customer. Our lead-generation sales philosophy is simple:
Focus on the 20 percent of your current customers who generate 80 percent of your revenue. These should be your ideal customers.
Knowing the characteristics of your top customers can help to clarify and identify potential leads.
How to start to clarify your ideal customers:
- Using your CRM system analyze sales from the past several years and export the list in a spreadsheet.
- Sort the clients and their purchases by the revenue they generate.
- Ideally remove the cost of sales so you can get to a more accurate net profit per client.
- Link to your accounting system and review the aging pattern from Accounts Receivable
- Does your CRM system also show they are good references and sources of referrals?
- Review the demographic characteristics: location, industries they are in, how many employees and what are their annual sales.
- Using the knowledge in your CRM system and other research, determine their future growth trend. Is their business and industry growing?
- Consider subjective information. Ask your sales force, customer service representatives and refer to your CRM system to determine if the key contacts match up with your business values. Does your staff enjoy working with them or are the key contacts sucking precious time and resources from your business compared to the actual dollar value.
- What other characteristics would you classify as ideal? Start by asking those who are involved in your customers' experience. Great insights can come from a perspective of the customer.
Use the knowledge in your CRM system for clarity and better decisions
If there is newly discovered information that you should be capturing in your CRM system, now is the time to add the additional fields into your adaptable CRM system. Make sure other members of your CRM team know about the importance of identifying these ideal characteristics and building up the quality of your customer database.
If you put all your marketing efforts toward gathering that ideal 20 percent, you're going to do a whole lot better year after year than if you go after everybody!
What is important to know about your ideal clients/customers?