As a business owner you want both money and work satisfaction, right? You’ll only get these two essential things if you have the right customers to work with. So, what do I mean by your “right customer?”
The answer is your customers must respect you, value your services, and compensate you well. As a small business owner you do not go into business for yourself to run the risk of losing money or to just break even. You go into business to make money. Part of the responsibility of working for yourself is about knowing your limits and your area of expertise. When you don’t honor these essentials or empower yourself to step up and into action, you run the possibility of losing more than you might possibly gain.
Numerous business owners, like consultants or coaches, have a vast customer base, but their income actually only comes from 20-25 percent of them. The reason is a lot of individuals try to squeeze as much as they can out of consultants without compensating them what they deserve. There are also individuals who treat consultants like commodities or mere trainers. Although these clients may pay you well, at the end of your day, people who don’t appreciate your services are not good for your overall brand image or motivation to keep going through the challenging times. This is one of the many reasons for being capable to accurately identify your key target demographic and/or perfect customer type.
One of the suggestions I provide my business customers is take stock of their clientele every few months and evaluate every customer in terms of overall direct and indirect profitability. Yes, I did just say that!
This may look like it is entirely just about the money but in truth it isn’t. By reviewing your “active” clientele, you can honestly identify areas you are establishing for niche marketing focuses while learning which areas you are truly honing your skills as well as reputation.
Let’s change the word profitability to effectiveness. The more effective you are by way of your customers, the better your balance sheet will look at the end of the year. When there is a flow of financial abundance for you then your overall anxiety level is reduced and you can become even more effective and efficient with your supportive individuals. When you are working in your ‘sweet’ spot you are working at maximum efficiency which results in you becoming more motivated and creative.
To help you in moving forward to identify with what I am sharing with you, here is an exercise for you:
Craft a record of all of your clients and ask yourself the following questions while you move through each name on your list:
- Is this customer helping me boost my brand image? If yes, then how are they boosting my brand? If no, then do they have the possibility to enhance my brand? If no again, then why am I still working with them?
- Are my earnings from this customer proportional to my time investment? (Remember . . . your investment doesn’t just include financial, but also how much time outside of your “appointment” do you invest in your client’s partnership experience with you? I will have an hour coaching call, but the time leading up to this hour is roughly twenty minutes; my time following is about thirty minutes. Their fee does not simply compensate me for the hour of coaching, but also my prep and valuable follow-up. Also, the fees you receive for your services pay for more than just direct time involved with the client.)
- Am I doing justice to my intellect/ability as a result of working with my client? What am I getting from working with my customers? i.e.: Is my “soul” being fed by working with this client or are they leaving me feeling drained? Hint: If you are continuously feeling drained then you must ask yourself “Why am I doing this?” If the motive is merely “for the money,” then you must begin reevaluating your response to the second point.
- Is the customer making unfair demands of me? This is also referred to as “managing” your customer expectations. If they are requiring or expecting specific assistance from you (i.e. an extraordinary amount of time between appointments, vaguely associated research data etc.), then you need re-examine your responses to point two and three for this client.
As you work through the above four questions, your replies will help you decide which clients to maintain and which ones to re-consider. I wouldn’t recommend firing or referring out all the clientele on your “reconsideration” list, however what you can do is, try and re-negotiate your conditions of service with these clients, so they grow to be more profitable, err effective for you. The ones that fail even this test have to be gently directed to other more suitable support networks. After all, clientele who are not helping you grow and expand you or your business in anyway are nothing short of a liability.
An alternative case in which I would recommend releasing a customer is if your personalities are entirely incompatible. Any consultant worth their weight in salt would say to you that it is better to end a relationship with a client before you end up experiencing an argument because of your personal or professional differences.
Once you have decided to close your association with a customer, honesty really is the best strategy. Instead of beating around the bush, you must tell them why you feel you cannot work together. This of course doesn’t indicate that you have to be rude, still the most difficult truths can be made respectable if you touch them up with diplomacy. You may possibly be shocked to hear your client feels the same way and didn’t possess the courage to verbalize something or initiate change. You may be looked at as the hero and you can improve goodwill within your community by placing your customers in the hands of the right support individual.
To your success!
Coach Karen K