Solving ‘Too Many Clients – Not Enough Profit'
Solving ‘Too Many Clients – Not Enough Profit'
Many business owners tell us, “its hard to get good clients.” It’s not hard, its just that nobody ever taught you how to attract the right type. After all, how many hours do YOU spend a year, learning about technical issues. Now how many hours do you spend, learning about better selling and marketing and smarter running of your business? If it’s not about half/half, you’ll probably find your potential for success, limited by your ‘personal exertion’ and your ‘creativity’ is copying ideas from your competitors.
Here’s how you can progress down the path to attracting better clients…
Define Your Clients…
The definition of your clients involves working out what makes a client profitable and at what point they become a cost. Many businesses put up with clients that consistently pay late, change their minds or appointments, expect miracles in terms of timing, insist and haggle over discounts and are just downright stressful to work with. It should be a privilege to do business with you; not a right. Clients that are not profitable should be ‘fired’ or at least discouraged from using your service or buying your product. The first step to doing this, is to define at what point a client stops being profitable.
Firstly, your clients can be classed from A to D, with As and Bs being profitable and Cs & Ds being a cost. Start by looking at your most profitable and ideal clients, what do they do; what characteristics do they have? Then look at your worst clients and list their typical traits. As a rule of thumb, you should end up with about 20% of your client base being ‘A’ grade, about 30% being ‘B’, 30% being ‘C’ and 20% being ‘D’ grade.
Once your clients have been defined into 4 classes, the As & Bs should receive a letter of appreciation telling them, they are your best clients and encouraging their custom. It will make all the difference. The Cs & Ds should be sent a letter explaining the situation and encouraging them to become A and B clients, by making it clear what you expect from them, in return for your products or services. If there is no change from a C or D client after a couple more contacts, you should cease doing business with them; refer them to your competition! They are costing you money!
Solving Too Many Clients Not Enough Profit - To learn more about this author, visit Steve Leach's Website.
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You see, Pareto’s principle states that 80% of your business comes from 20% of your clients. The other 80% of your clients are probably costing you money… Most business owners can reel off names of clients who consistently complain about how long they take, how much they charge, want to return goods because they ordered the wrong ‘widget’, then take months to pay.
Many business owners tell us, “its hard to get good clients.” It’s not hard, its just that nobody ever taught you how to attract the right type. After all, how many hours do YOU spend a year, learning about technical issues. Now how many hours do you spend, learning about better selling and marketing and smarter running of your business? If it’s not about half/half, you’ll probably find your potential for success, limited by your ‘personal exertion’ and your ‘creativity’ is copying ideas from your competitors.
Here’s how you can progress down the path to attracting better clients…
Define Your Clients…
The definition of your clients involves working out what makes a client profitable and at what point they become a cost. Many businesses put up with clients that consistently pay late, change their minds or appointments, expect miracles in terms of timing, insist and haggle over discounts and are just downright stressful to work with. It should be a privilege to do business with you; not a right. Clients that are not profitable should be ‘fired’ or at least discouraged from using your service or buying your product. The first step to doing this, is to define at what point a client stops being profitable.
Firstly, your clients can be classed from A to D, with As and Bs being profitable and Cs & Ds being a cost. Start by looking at your most profitable and ideal clients, what do they do; what characteristics do they have? Then look at your worst clients and list their typical traits. As a rule of thumb, you should end up with about 20% of your client base being ‘A’ grade, about 30% being ‘B’, 30% being ‘C’ and 20% being ‘D’ grade.
Once your clients have been defined into 4 classes, the As & Bs should receive a letter of appreciation telling them, they are your best clients and encouraging their custom. It will make all the difference. The Cs & Ds should be sent a letter explaining the situation and encouraging them to become A and B clients, by making it clear what you expect from them, in return for your products or services. If there is no change from a C or D client after a couple more contacts, you should cease doing business with them; refer them to your competition! They are costing you money!
Solving Too Many Clients Not Enough Profit - To learn more about this author, visit Steve Leach's Website.
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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