Tuesday, October 17, 2023

How to Identify and Nurture Your Top 20% Profitable Clients for Long-term Success

How to Identify and Nurture Your Top 20% Profitable Clients for Long-term Success written by John Jantsch read more at Duct Tape Marketing

You know those mornings when the alarm rings, you see a client meeting on your schedule, and your energy immediately drops? It's not because you dislike your job; you love what you do. It's just that one client, or perhaps, a handful of them. But flip the coin, and you’ll find clients you absolutely relish working with. The ones who are profitable, who respect your expertise, and view their association with you as a partnership.

Understanding the dynamics of this spectrum is crucial to developing a sustainable marketing strategy. Let's dive into why this matters and how you can leverage it for the benefit of your small business growth.

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1. The Pitfalls of Being Everything to Everyone

If I've learned one thing over my years in business, it's this – trying to be all things to all people is a shortcut to inconsistent engagements and results. And trust me, this isn’t just a business philosophy I preach, it’s one I’ve experienced firsthand. Businesses, in their zeal to grow, often onboard clients indiscriminately, thinking more clients equate to more revenue. But is that revenue profitable?

There seems to be an unwritten, strange universal law in the world of business. Often, the clients who haggle most over price turn out to be the most challenging to serve. Can you relate?

2. Identifying Your Ideal Clients

Now, what if I told you that among your clientele, there exists a golden list - the top 20%. They aren’t necessarily the ones bringing in the highest sales volume, though that might be one of the criteria. These are clients with whom you have a rewarding experience. Those who not only value what you provide but might even be singing your praises to other businesses, referring you, and thereby enhancing your network.

Pause for a moment. Reflect on your current list of clients. Who among them fit this description? If you're thinking about sales volume alone, you're on the wrong track. Think profitability, the ease of collaboration, and the value of their network.

By concentrating on the characteristics, challenges, and problems faced by this top 20%, you get a blueprint. A blueprint that, when fed into your marketing strategy, can help you attract more of such clients.

3. The Power of Focused Marketing Strategy

Starting to direct your marketing strategy towards this identified top 20% doesn't mean excluding others. However, it does imply a refined focus. With a clearer audience in mind, your business can experience:

A widespread mistake is that businesses spread themselves too thin, trying to resonate with everyone. The result? Their message gets watered down, failing to attract the right clients. In fact, a diffused marketing approach makes it challenging to create a consistent customer journey, retain clients, or even understand what draws your ideal clients in the first place.

4. Recognizing the True Cost of a Mismatch

Working with the wrong client or one that isn't priced correctly costs you more than you think. Sure, the revenue number looks impressive, but what about the unseen expenses? The stress, the extra hours, the potential compromises on quality?

Embrace the mantra of quality over quantity. Don't be lured by mere numbers. Instead, understand the value behind those numbers. By identifying and nurturing that elite 20%, you not only bolster your profitability but also build long-term relationships that are rewarding both financially and experientially.

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Building Momentum with the Right Partnerships

From a strategic standpoint, there's immense untapped potential with this 20%. Believe me, a significant portion of them would happily do more business with you. And when you nurture these relationships, the growth you witness is exponential, far outpacing the one-off projects that come your way randomly.

Directing your focus, or as I like to call it, "strategically narrowing" ensures you attract those ideal clients. The right clients, who align with your values, are the catalysts allowing your business to thrive, fostering momentum and growth.

To all the entrepreneurs reading this, I challenge you: go through the exercise of sifting out your top 20%. Understand them, value them, and integrate them into your marketing strategy. It's more than just a business move; it’s a pivot towards sustainability, growth, and satisfaction.

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