This is quite possibly one of the most important questions you can ask yourself about your business. And whether you’re rebranding or not, December is always a good time of year to be thinking about this sort of thing. So grab yourself a notebook and a pen and take a little time to think about the people who keep your business going.
Profitable clients are the ones who value what you do and are prepared to spend what you want to charge. They pay on time, they are happy to fit into the way that you work best and they love what you do. They recommend your business to equally wonderful people and they don’t make unreasonable demands of you or your time.
They are the people you want to attract more of. So who are these profitable clients and what motivates them to work with you? What do they value about what you do?
It may sound obvious but having asked hundreds of business owners this very question, I promise you it’s a question that many of us don’t think about often enough.
How to identify your most profitable clients
In an ideal world you’ll have a database that enables you to sort your clients by what they’ve bought and how much they’ve spent. Once a year, at the very least, it’s well worth printing this report out and really getting to grips with who your top clients are and profiling them into groups. I’d recommend you aim for around six or seven groups or customer archetypes. Start by sorting each by profitability or spend. Now let’s examine each one.
Is there a common thread of products or services bought within each group? Are they buying what you want your business to be known for? Are you the right fit for them or could another business serve their needs better (freeing you up to focus on what you do best). Do they value what you do? Are they prepared to spend what you want to charge?
Does this group tend to pay on time? Do they bring repeat business? How about recommendations? Is the work exciting and profile raising for you? Are you making a significant difference? Try and rate each one on a scale of one to ten to help yourself visualise which are your key client archetypes.
What is motivating your clients to buy from you? The motivation is likely to be very different within each group and it’s important to understand this as fully as you can, it’ll be invaluable when it comes to writing website copy and creating any marketing collateral.
You can also look at any demographical information (age, gender, job title etc.) to see if there is any value in what you look at. But in my experience, the game-changing knowledge is understanding what motivates your best clients to buy from you. Having that knowledge changes everything because it makes it very easy to continue to attract more business from those clients, as well as attracting plenty more like them.
And the less profitable ones…
Equally it’s worth understanding why the bottom two or three groups worked with you because you probably don’t want to attract them again. It’s often the case that these clients generally don’t value what you do, they don’t really like doing business with you and, let’s be honest, you probably don’t like doing business with them.
They pay late, they always challenge you on price and they’re rarely happy. This doesn’t mean, however that they don’t spend much – sometimes these people may be some of your top spenders, but when you factor in the management time you spend on keeping them happy, the cash-flow challenges they cause and the emotional drain they put on your business you have to ask yourself whether it’s all worth it.
Use this process as an opportunity to cherish the clients that you really want and attract more like them. Be brave.