This week on “Mind Your Own Business,” Why are all customers not equal?
Ah, customers – the lifeblood of all of our businesses they are essential to every single business but, the reality is that some customers are more important than others, and what you need to understand is which customers are your core customers which customers are your ideal customers, and I’m going to help you understand why.
I want to introduce you to Fred, not his real name, Fred has run a business for ten years, and when he first started, just like many of us, his marketing strategy was to find somebody with a pulse and a chequebook and turn them into a customer.
He didn’t have too many customer requirements or criteria; he just wanted people to come into his business so he could pay the bills and establish himself, and over the years that worked, it worked well.
He then employed people and got his sales and marketing team up and running and built the operation side of his business, and financially started resourcing his finance department and eight years later, he looked back at his business, and it had grown into a bit of a monster, and Fred was tired, and he didn’t quite understand how it got to the position that it got to.
He was a successful business owner and had a lot of turnover, but things were much more stressful than they needed to be, he had an epiphany, and he had his epiphany because he had been paying attention. He started noticing that in operations, there were just some customers that he wasn’t set up to deal with properly and over the years, he’d taken on all of these big customers and small customers, and complicated customers without really understanding what he was good at operationally and what he could deliver with good margins and consistent quality.
He looked at his marketing team, and he realised that his marketing team hadn’t really been able to get the traction that he wanted from marketing, and the traction that they were getting was attracting a whole bunch of random customers lots of them these types of customers that operationally was bottlenecking their business and were tying up his team in all sorts of complicated things.
Then he looked at his sales function and realised that his sales function just wasn’t set up correctly. The sales team was more of an order taking team; they didn’t understand how to interact, how to close, how to onboard the right types of customers, and when he looked at his finances and customer data, he realised that some customers just weren’t good from a cash flow perspective and were also not that profitable.
Then Fred made a decision, he decided to focus on his core customer on his unequal customer he was able then to focus all of his resources across sales and marketing, and finance and operations to be able to find, convert and keep this unequal customer.
Fred’s life has been significantly easier; his team is less stressed out from an operational perspective things are performing a lot more smoothly.
He’s able to invest in the right kind of equipment and infrastructure, and from a financial perspective: things are good, so the key lesson for you is: you need to be like Fred.
You need to go and find your unequal customer to help you create scalable, sustainable growth in your business. I’ll see you next week on “Mind Your Own Business.”
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Marco Soares is an award-winning business mentor and is available if you’d like help implementing these tactics.