Do you have clients who take up a huge amount of your time, pay you next to nothing and rarely value you or your team at all?
The bad news is you aren’t alone as in most businesses the worst 20% of clients take up 80% of your time.
The good news is that it can be fixed. You will feel more empowered and less stressed and generate more money too! Simply follow these 6 steps and goodbye stress, hello profit!
Step 1 – take stock of what you have
You need to understand your current client demographics. This doesn’t have to be a complex task. Consider every client you have now and how much they pay you versus how much of a pain they are to deal with. Plot them on a chart like the one below
Step 2 – understand what your current client mix really means
Once you have plotted your clients you need to split your chart into four sections.
We are interested in understanding those in the top left section.
These are the clients you work best with and your current possible ideal clients. They appreciate what you do and are therefore less of a pain to handle and they pay you well for what you do.
Step 3 – Develop a niche
We now know who your ideal clients are from your own client set. We now need to see how we can attract more of the same. You need to spot trends with these clients. Consider the following:-
- What industry are they in?
- What size are they? (Turnover, number of staff?)
- What products/services do they buy from you?
- Do you do something customised for them that could become a core offering for others?
- What re the owners like? (Age, sex, location, interests, hobbies?)
With trends now identified you can start to get an idea of what type of clients you serve well. Do you like working with these people. Can you develop a specialism/niche for these type of businesses or people?
A niche or specialism doesn’t have to be a set industry, it can be people with certain interests, people from a certain location, businesses with a certain turnover. It can be anything that sets you apart from the rest.
Step 4 – Quick wins for more ideal clients
Now you know what an ideal client looks like to you the challenge is to find more of them. The first step is looking within your own client base. It’s the two mid sections we are interested in.
Need to be less of a pain to handle – Look through this section of clients. Do any of them have the core characteristics of your ideal client / niche? What is stopping them being in the ideal client section? Can you improve them? I’m certain you can, you just need to tell them. They probably don’t know they are being a pain and chances are you have let them get away with it or even taught them to be like that. Turnover a new leaf. Tell them what you expect going forward and put in steps to ensure it works.
Need to value you more – Look through this section of clients. Why aren’t they valuing you fully? Chances are they are either long term clients who you have never ‘sorted’ moving onto the new packages/prices or they don’t know about your full range of products/services so cannot buy them. Now is the time to sort it. The longer you leave it the worse it will get. If you need to increase prices then call them in and show them the value you can deliver and that by staying on the prices they are on you cannot deliver such a service. If you need to tell them about products/services they don’t know about then again, call them in and run a review with them. Tell them about your full range or certainly those that will help them.
Step 5 – Create room to grow
This and step 6 are interchangeable. For some businesses step 6 simply has to happen first to improve profit/cashflow. Be aware though that if step 6 is done first the results take longer and it can be painful/stressful.
This step has a fear factor that you need to get over. You need to ‘sack’ your worst clients.
They are your bottom 20% and they are taking up 80% of your time/resources. They do not appreciate fully what you do and will likely never pay you what you are worth. It takes a long time to keep them and develop them into ideal clients as you cannot change everything about them in one go. You need to either improve what they pay and then later how much of a pain they are or vice-versa. Doing both in one go will not work. They will not likely survive the journey. Find somewhere else that can look after them and move them on. Do it quick.
You have now just created massive space to grow!
Step 6 – attract more ideal clients
Your existing marketing is likely saying the wrong things about you. Chances are you had only a few ideal clients and many that weren’t. You need to consider everything from step 3 above and use it for marketing. Ensure everything about you tells these clients that you are the expert for them. Show how you understand their pains and troubles. Show that you know how to address their problems and even how to fix them.
Figure out where your ideal clients like to hang out. What interests them? What makes them tick? You have data as you already have some ideal clients. Go ask them lots of questions. Find out everything you can. Invite them in for coffee and a ‘free’ special service in exchange for picking their brains.
Ask your existing ideal clients for referrals. People like to hang around with people similar to themselves. Opposites don’t really attract, similarities do. It’s just less stressful. Create an incentive scheme for your ideal clients to refer ideal clients to you. Let them know exactly what you are looking for and that you think they will be well placed to refer those type of people to you.
We hope this article has inspired you to go away and take action in your business. Being a niche is about making people feel special. In a world where we try and fit everyone into boxes people like to be recognised as having special requirements. Show them how special they are.
We as a business value our clients. They truly are fantastic people and we love making a difference to their businesses and their lives. If you are a service based business especially a creative or technology based business or in the construction industry then we can most certainly make you feel as special as you really are. If you’d like a free no obligation chat about how then book a discovery call.