Tuesday, April 30, 2013
Please Don't Buy!
What kind of customer should you repel?
That's right. You need to figure out what types of customers you don't want to attract and do business with. As counterintuitive as that sounds, it can be just as important as knowing who you want to attract.
The 80/20 rule tells us that in most businesses, 20% of the customers provide 80% of the profits. Knowing who you want to attract can help you greatly improve the odds of increasing the ratio.
At the same time, most businesses also have to deal with a percentage of customers who create the most headaches while providing little profit for the business. Knowing who you want to repel should help reduce the impact this group will have on you.
Knowing the types of customers you want to repel will have many side benefits besides simply increasing the bottom line. It will improve employee morale since coworkers will not have to deal with as many problem-causing customers each day. It will also allow you to spend more energy and resources on the customers who actually provide the most value and profits for your company.
Go through your existing customer list. Pick out the customers that provide the most headaches and the least profit for your company. Figuring out how to repel this type of customer could be as simple as raising prices enough to either make them not want to do business with you or, at the very least, make the pain of dealing with them more profitable and bearable.
The benefits of knowing what types of customers you don't want can prove to be nearly as important as knowing who you would like as a client.