Unlock Business Growth is as simple as understanding the quality and value of who your A, B and C clients are.
The following marketing adage hold true for all businesses….
“It is 10 times easier, faster and cheaper to sell to an existing client than it is to sell to a new client”
There is a follow on from this as well…
“It is 10 times easier, faster and cheaper to sell to new clients that have similar characteristics to your existing client than it is to sell to totally different clients (markets)”
But I hear you say …”my clients are all different and there aren’t any similarities”
You have probably heard of the Pareto Principle. When this is applied to your customer base you will see that 20% of your clients will deliver 80% of your revenue and profits. On the other hand the 80% of your clients that deliver 20% of your results will probably soak up 80% of your time.
The secret to leveraging your marketing resources and especially your time is to focus on finding more clients that are similar to your best clients.
This article will help you discover these similarities for yourself as I show you how to look.
A simple 3 x step process:
1. Define your “A List” clients
This is the Sesame Street approach to getting the basics of your marketing and sales process right.
• Simply create a list of all your clients and what they spent with you over the last 12 months or if your business is seasonal go back 2 years. Do this in Excel as it will allow you to more easily analyse your data.
• Sort your client list with the largest revenue on top.
• Draw a line under the top 20% of your clients ie if you have 200 clients draw a line after the 40th client. These are your “A” list clients
2. Define your “B List” clients
This will identify which of your remaining client s are worthy of your time and effort
• For each of your remaining list of clients estimate the annual total potential value of your relationship. Simply add unrealised potential to past revenue to calculate total potential.
• Again sort the list with largest potential to lowest potential
• Draw a line under the top 20% of these clients ie if you have 160 clients in the list draw a line after the 32nd client. These are your “B” list clients
3. Define your “C List” clients
These are simply all the remaining clients.
• At this point you can refine your “B List” by adding some “C List” clients that have high potential value but just missed the cut.
5 things you need to do to rapidly unlock business growth opportunities:
1. Protect your “A List”
2. Expand your “A List” by building up the revenue from each of your “B List” clients. Remember it is cheaper and easier to sell to existing clients
3. Find an efficient way to manage your “C List”
4. Focus your marketing to attract clients with similar characteristics to you’re A & B List clients.
5. Create a screening process that eliminates “C List” prospects becoming clients
When looking for similarities if you’re a B2B business investigate:
1. Industry
2. Company size
3. Geographical location
4. Products or services bought from you
5. Contact person’s role and position in their business
6. The problems that you solve
7. The pain that they experience
When looking for similarities if you’re a B2C business investigate:
1. Gender
2. Age
3. Marital status
4. Geographical location
5. Products or services bought from you
6. The problems that you solve
7. The pain that they experience
The above lists aren’t exhaustive so you will need to think about your particular business and refine the check list you’re your unique circumstances.
Your Ideal Client
By know you have defined your target market and what the characteristics a good client are so your ready to move to the next stage which is:
How to define your ideal client?
Stay tune as this is the subject of the next instalment in the Unlock Business Growth series.
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