Have you been keeping an eye on your best customers? The kind you wish all of your customers were just like them? The kind who are easy to please, loyal, and ready to tell a friend about your wonderful service?
According to Michael Masterson,
““The single fastest way to turn your ordinary business into a cash machine is to redesign your sales and marketing strategies to focus on stimulating buying frenzies among the top 20 percent of your customer base.”
We’ll look at how to identify and focus your marketing on this group, but first, you need to be aware that most service professionals and service based businesses sometimes resist doing this, for the reasons given below.
Many small business owners, and that includes service professionals, find it challenging to narrow their focus to one primary group of customers because, well, they want to help everyone! Very often of course, their service can help a variety of customers.
The other reason is that it goes against human nature to narrow your focus for purposes of growing your business. Common sense seems to tell us that if you want to grow your business, you need to appeal to more customers or clients.
Focus Your Marketing and Promotion
But the opposite is actually true. When you narrow your focus to a particular group of customers you become an expert in solving problems that are unique to this group. You get to know them very well, which helps you to zero in and develop additional products and/or services to solve their major problems.
This is what Tim Ferriss (The 4-Hour Workweek) discovered one evening after he read Vilfredo Pareto’s book that first developed the 80/20 principle as we know it today.
The following morning he fired 95% of his clients (as in, he said to them something like, “I can’t serve you any more guys and gals, find someone else to service your needs!”).
Here’s what he said about the experience:
“I made several simple but emotionally difficult decisions that literally changed my life forever and enabled the lifestyle I now enjoy. The first decision I made is an excellent example of how dramatic and fast the ROI [return on investment] of this analytical fat-cutting can be: I stopped contacting 95% of my customers and fired 2%, leaving me with the top 3% of producers to profile and duplicate. Out of more than 120 wholesale customers, a mere 5 were bringing in 95% of the revenue.”
So, how do you decide which customers to target in your marketing and promotion (or to keep in your business), the people who make the cut for the top 20%?
Fat-Cutting Tips to Target the Top 20% of Customers
Here are three tips:
- Attract or keep customers who can most benefit from what you have to offer. Asking your best existing customers questions as I have detailed in “How to Discover Why Your Customers Buy from You” should give you a glimpse into which people benefit most from your services.
- Attract or keep people (customers) you would most enjoy helping – or working with.
- Attract/keep people who will be easiest to reach, and who will be most receptive to what you are selling. These will be customers/prospects who know they have the problem you can solve and are looking for the solution you offer.
It’s important to understand that just because you select a particular group of prospects/customers to target with your marketing, this does not mean that you can't help others who may come into your business!
It only means you're going to proactively target and attract the 20% group with your marketing and promotion. Eventually, most of the other 80% who do not make the cut will either eliminate themselves, or better, they won’t be coming into your business at all.
But you need to understand that failing to “design your perfect customer” (and targeting them with your marketing) is a big mistake 99% entrepreneurs and small businesses make, according to Michael Cheney in The Customer Magnet (which probably accounts in large measure for why 95% of startups failing before their first birthday!)
For boosting sales right now, you can start contacting your top 20% existing customers. Attract them back for repeat business by sending them discount coupons for example. It’s very easy today with SMS messaging services such as TEXT 180. It is estimated that 95% of SMS messages are read within 1 minute after they’re received. Get their smartphones buzzing!
If you can combine helping your customers to learn something new and doing these soft promotions, you may be surprised by your results!
It pays to periodically take a deep dive into your business to identify the top 20% of your customer base. This is the group that typically accounts for 80% of your revenues.
Find out what makes them so great, and the traits they have in common that make them such good customers/clients. And then direct your marketing and sales campaigns to them and people who are just like them. Focus on this small niche.
You'll net many more qualified consumers or clients like your ideal top performers – and enjoy hservices business marketing guides... take the squeeze off yourself and stop living paycheck to paycheck.igher profits, and sales of your services.
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