I know. It sounds counter-intuitive, doesn’t it?
After all, the mindset of most people is that when we want to make more money, we need to find more customers. This almost always leads to more sales calls, broader and more expensive marketing efforts, and of course, lots of extra work and frustration.
Sometimes it pays off. Usually it doesn’t.
Is finding more customers really the answer to making more money?
For most businesses, the answer is usually a big, loud and booming no. More customers means more work, more headaches, more staff and of course, more overhead. Sure, you may generate more revenue than before, but do you really want those new customers if, after the additional expenses, you’re still bringing home the same amount of money? The only thing you’re really gaining in that scenario is stress, and I think we all have enough of that already!
No, what you want is more of the right customers. This means focusing on a niche; the tighter, the better. Then, only target customers who fit that niche.
I know your gut reaction is something like “If I focus on a niche, I’ll leave a lot of potential customers (and money) out there for my competitors and I won’t make enough money.”
Yes, you will leave potential customers out there, but you will still make enough money. In reality, you’ll make more money with less effort and stress.
It will be scary as hell. You’ll use every excuse you can come up with to put it off. You’ll continue doing what you’ve always done until one day, something just just clicks and you realize it’s not working the way you want. Maybe you realize you’re spending far too much time catering to the whims of a few customers who, coincidentally, are your least profitable accounts. Or maybe you finally see that your close ratio is horrendous. It could be anything, but somewhere down the road, you’re going to see that some, if not most, of your clients just aren’t the right fit for your company.
What do you do once your eyes are open?
Figure out exactly who you want to work with. Who are you most profitable customers? What traits do they have in common? Who can you truly help the most right now? Those are the type of customers you want to need to focus on.
Now, start going after these type of customers while weaning yourself off of the wrong ones as quickly as possible.
That’s right, you’re going to have to fire some of your customers! It can be scary, awkward and liberating all at the same time. The key is to treat it just like a break up. Be tactful, yet firm. Don’t place blame or say negative things about them. You can just say that your company is shifting focus and they just aren’t the right fit for you anymore. It’s the business version of “It’s not you, it’s me.” You can even point them to a few companies who might be a better fit.
Getting rid of the dead wood allows you to develop better relationships with your profitable customers and find new customers who fit your company better.
As you begin to focus on a specific niche, you’ll see your sales process improve too. Similar prospects will have a lot of the same questions, and as you develop the right answers, it will almost be like following a road map. I used to work at a software company that targeted people looking for IT certifications. They had the process so well refined that when you would ask a prospect a question, you could be assured you’d receive one of two or three answers. If you followed the process properly, twenty minutes or so was all it took to close the deal on a $2,500 software training package.
Focusing on a niche usually means that people who know and respect each other will talk about your company and the products or services you provide. If you do things right, it won’t take long before you have an almost cult-like following. It’s a hell of a lot easier to sell to people who have heard about you through a trusted source.
Remember, you started a business to make money, but not sell your soul. If you spend your days doing work you love for clients who respect and value you, you’re going to perform better, feel better, have more free time and probably live longer too!
