Most businesses spend a lot of time, money and energy trying to attract new clients. This is perfectly natural and a logical approach to take for any business trying to grow or even remain constant. After all, existing customers will stop buying from your business for a number of reasons. Typically they move to another town or reach a different stage of life so your offering has no attraction.
But, in our efforts to attract new clients we run the risk that we lose sight of the end result by focussing on the immediate goal of sales and “busyness”. Yes, new customers keep us busy. Yes, new customers mean sales.
However, the important question is “Are these the right customers?” and “Are these the right sales?”
And, I would suggest, we need to ask the same questions of our existing customers. We are always reluctant to do this. What if the answer is “No” and “No”? What do we do then?
The reality is that it is unlikely that a major part of your business is dependent on the wrong customers buying the wrong goods or services. Doing something about it is not going to destroy your business. It may cause a drop in sales but, done properly, it will increase your profit line.
The first place to start is the customers who are reluctant to pay. You know those – the ones you took on because they had a heartbeat and a cheque book but now you find the cheque book has flat-lined.
A customer is not a customer if they don’t/won’t pay you. Continuing to provide goods and services to these will rarely work and you may as well register as a charity and make it official!
Politely part company with these customers as quickly as possible! You are losing nothing and gaining capacity to work with real customers.
The other group of customers worthy of critical examination are those who only buy low margin goods or services and then expect a discount. Again, chasing more sales leaves us susceptible to loss of margin and it is that margin that pays the overheads and rewards the business owner.
The overheads generally get paid so the discount/reduced margin is coming straight out of the business owner’s pocket. Are you happy with that?
Seriously assess whether these clients add any other value to your business before meeting with them to negotiate a better deal. Assuming all that is unsuccessful, (again politely) encourage them to become plaque in the veins of your competitors.
Ensuring new and existing customers are right for your business is important. Establish an ideal customer criteria and apply it to new and existing customers to improve profit.