Shaping Your Client Base
A friend of mine recently made a major business decision. He cancelled his business’ 1-800 number.
Bad move? Maybe not.
You see, my friend realized that the sort of clients that were using his 1-800 number were exactly the sort of client that he did not want to have. This got me thinking about the fact that a key business tactic is learning how to optimize your client base.
It may seem harsh, but some clients are just not worth having. You know, the kind that constantly need support for trivial tasks. Or, the kind that don’t want to pay the price for a good product.
Any business worth its salt needs to be intentional about shaping its clients base: acquring the right sort of customer and getting rid of the bad seeds. Even a company like Target would do well to get rid of the sort of customer that returns more product than not. How they could manage that strategical coup is another question.
But shaping your client base is an even bigger issue for small businesses and startups. Business owners have a limited amount of time and energy, and that time can’t be spent with excessively demanding clients.
So how do you shape your customer base? Well, for starters, you should start by writing down the characteristics that make the “perfect” customer. The “perfect” customer never needs support. The “perfect” customer has nothing but praise for your company. The “perfect” customer is easily pleased. The “perfect” customer doesn’t try to micromanage your business for you. The “perfect” customer pays a premium for your product and services.
So once you’ve identified some of the features that make a great customer, implement policies that encourage that kind of customer and discourage customers who 1) constantly need support 2) constantly complain 3) are never satisfied with your product or service 4) tries to tell you how to run your business and 5) is always looking for discounts.
What might some of these policies look like? For starters, offer a great product or service. That way, you eliminate the need for any intelligent and rational person to whine and complain. Once you know that the problem is with the client, consider setting up an indirect support system so that there is a time-buffer in place. In other words, unless absolutely necessary, don’t let your customers contact you via phone on a whim. Force them to file a trouble ticket or send an email. That way, you can deal with bad customers by simply ignoring them until they leave you alone. Of course, you’ll give your good customers (most of them, hopefully!) priority support.
Another recommended policy is to raise your rates. Again, this might seem harsh, but you can reduce your overall work load, and the higher paying customers tend to be the easier customers to work with. Raising your prices can work wonders, and should be done by everyone who has a full work load. Doing so is a natural way to weed out bad customers and maximize your profits. Trust me on this! If there is one tip I could give any business entrepreneur it would be this: once you have a full work load, double your rates for any new clients or new services.
So those are two major tips for shaping your client base. Lots of you have experience with this stuff so let me turn to you now. Do you have any other suggestions for strategically shaping a customer base?
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