If you’re a small business owner intent on growth, there’s always a small voice in the back of your head asking, “Where will I find my next new customers?” Attracting customers is a top priority for all businesses--and the smaller the business, the greater the concern, according to Hiscox’s 2015 report of the DNA of an Entrepreneur. In fact, when business owners were asked about their “Biggest fear for the year ahead,” 23 percent said they worried about being able to attract new clients; among the smallest firms the figure rose to 27 percent.
Of course, not all customers are created equal. Growing businesses want customers who, among other things, pay their bills reliably. In fact, not being paid by their clients was the second most widely mentioned concern in the Hiscox report, cited by 17 percent of respondents. Fortunately, there are simple things businesses can do to help address both concerns.
- “Gratitude Marketing: How You Can Create Clients for Life” (Advantage Media Group, 2015). “With the cost of acquiring new customers about seven times what it costs to retain customers, companies that focus on nurturing relationships with A-list customers can realize sustainable growth while increasing retention, referrals, and revenues,” says Mike Sciortino, author of "Gratitude Marketing."
(In a nutshell, focus on "customer lifetime value," or CLV, which is the present value of future cash flows attributed to an individual customer over their entire relationship with your business. An online calculator can be useful in determining CLV.)
- Power Digital Marketing Inc., a digital marketing agency. “We determine our A-list customers by company size, profitability, and how easy they are to work with. For example, a customer could be really easy and fun to work with, but if they are not very profitable [to us], having more customers like them could be a risk,” explains Ronnie Kassiff, marketing director at Power Digital Marketing.
Kassiff has developed questionnaires to help determine which attributes best mark a prospect as a potential A-lister. For business-to-business enterprises, it’s important to understand demographics, company size, title, industry challenges, and other factors. For consumer-facing businesses, data gathering should focus on customer demographics, income, shopping preferences, detailed social information, hobbies and interests, and ways they like to consume content.
Bill Corbett, Jr., president of Corbett Public Relations, Inc., has created a step-by-step process for identifying A-list customers that he uses both internally and with clients:
- Look at your current clients to identify both good and bad qualities.
- Determine your current clients’ expectations.
- What keeps a customer with you? Why do they like you, and why do you like them?
- What interpersonal activities or interactions help to make a perfect client?
- What are the “must have” qualities of your perfect client (for example, pays on time, willing to invest in their business, communicates well/shares important information when necessary, willing to trust, etc.).
- Identify exactly who you don’t want to work with, and why.
- Use the above information to create profiles of current clients who are “perfect” and what makes them so.
- With profiles in hand, you then need an effective way to organize that information. College Recruiter, which helps college students and recent graduates find careers, uses a customer relationship management (CRM) tool to create custom fields from data pulled from a variety of sources. Steve Rothberg, president and founder of the company, says his firm then assigns the A-list accounts to its outbound sales team and the other accounts to its inbound sales team. “A couple of years ago we launched a program to focus more of our efforts on what we call our ‘ideal client,’ and those efforts have led to significantly higher sales, more satisfied clients, and higher renewal rates,” he says.
Once you know the kind of customer you want most, and develop a sales and marketing strategy that focuses on them, you'll be on your way toward conquering a concern that need not keep you awake at night.