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Identifying your ideal (targeted and preferred) 'Client Profile'

Discussion in 'Small Business' started by DiligentPM, 14th Feb, 2016.

  1. DiligentPM

    DiligentPM Well-Known Member Business Member

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    I would love to initiate a conversation with experienced small and medium sized business entrepreneurs about your marketing strategies re: building and growing your business through strategic marketing to attract the preferred "Client Profile" (understanding who your preferred clients are and targeting business to them).

    See the interesting article below on how to identify one's preferred 'client profile' proactively...

    The Four Types of Clients You’ll Encounter
    Open for Business: A Weekly Column for Small Business Owners
    [​IMG]
    Bending over backward to keep each and every client is the biggest mistake small business owners make.

    When you run your own business, having more clients doesn’t always mean more profit. In fact, some clients can be so detrimental to your business having them onboard can make you lose business.


    The key to running a successful home based business is identifying which clients to keep and which to pass on. There is nothing wrong with having a "pecking order" when running your own business, putting the more desirable clients at the top.

    In order to figure out which clients are worth keeping and putting before others, successful small business owners summarize their clients into four categories:

    1. High Profit/Low Maintenance. These are obviously the clients you want to keep because they pay well and are easy to work with. In other words, a small business owner’s dream! They are organized. They are easy to communicate with. They pay on time. They utilize your talents to the best ability. There is a mutual trust and respect. They may even give you a Christmas present or bonus! If you can develop a great relationship with these clients and keep them, you are so ahead of the game as you'll be making money almost effortlessly.
    2. High Profit/High Maintenance. Whether you choose to keep these clients or not is up to you. The high profit/high maintenance client may drive you up a wall. There may be drama, unexpected phone calls when you're on the beach vacationing, a ton of stress, disorganization and so forth. But the pay will be well worth it. To me, high maintenance can be amusing if you keep your sense of humor. Unless high maintenance goes too far by crossing the line of respect, eating up all your spare time, making you cry or reach for a glass of vodka after working with such clients, I say “go for it.” After all, sometimes big money comes with a small price.
    3. Low Profit/Low Maintenance. Sometimes a client may come along who doesn’t have a large budget or is asking for a task that doesn’t require too much skill or effort so the pay is lower than usual. But I say to keep these clients on board because it's easy income. And you never know when you’re going to hit a slow period. Also note that sometimes a low profit/low maintenance client can eventually become a high profit/low maintenance client. That happened to me a few times. I did such a great job at a low profit level, a client willingly increased my rate!
    4. Low Profit/High Maintenance. I’m not afraid to say these clients are the worst and should definitely not to be kept. They will expect you to jump through hoops while paying you peanuts. There will always be stress, tension, misunderstandings, frustration and possibly tears. The hours will add up and you'll have nothing to show for it but aggravation. You may find yourself passing up work from other clients because you are so wrapped up in this nightmare of a project, which isn't fair to you, your other clients or your business. Just say “no” and move on.
    By immediately recognizing a low profit/high maintenance client you can let him or her down easily by saying that you are currently over-booked and can’t take on a new client at this time.

    Or just be honest and tell them their rate is too low. But try to keep the working relationship positive, as you never know what can change in the future
     
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  2. EN710

    EN710 Well-Known Member

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    How do you rate yourself as a client @DiligentPM?

    From experience, clients in my previous workplace are either 1,2 or 4, 1 being big corporates, 2 some government departments and 4 small business with tight budget. You get 3 every now and but doesn't stay too long (mainly because they're smaller in size and mostly do one time projects), you have no 4 hanging around all the time because they hog your time with all issues they find.

    I tend to be either a 2 or 4 without trying... Making an effort to be a bit less maintenance, but what to do when the service are not up to par??
     
  3. Biz

    Biz Well-Known Member

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    Yep you have to be careful with who you target. Generally I try to avoid cheap people and certain races who are known for wanting big discounts. ;) . Also try to avoid stay at home mums, they hate the world and want to burn you and anyone they can in the process.
     
  4. EN710

    EN710 Well-Known Member

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    Lol, what's the matter with the last one? Any story?
     
  5. Biz

    Biz Well-Known Member

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    They are dealing with screaming kids and spilt breast milk. Sometimes they just have to cut loose and let it all out. They generally get very picky about service and products and often want special treatment.
     
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  6. EN710

    EN710 Well-Known Member

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    No problem if they pay premium for the treatment :Dhubby should pay
     
  7. Scott No Mates

    Scott No Mates Well-Known Member

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    My +1 stays home by her choosing. It's not the norm but why bother going back to work? Everyone wants to retire young, she did. :p
     
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  8. JacM

    JacM VIC Buyer's Agent Business Member

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    My favourite kind of client is one that is in the "building towards gate 1" phase. In other words, assembling a portfolio towards being able to afford a comfortable lifestyle in retirement, either at retirement age or sooner. It is incredibly rewarding being invited to help put the building blocks together to get people to that all important gate 1. What happens thereafter is cream on top for people. A more affluent retirement, or an earlier retirement, or more assets to leave to their children or whatever the case may be. I also really enjoy the privilege of observing people starting to learn HOW their investing is going to get them there. To see these people then confident enough to explain it to friends and family, and thus little bit by little bit change the futures of people around them. You are the product of your environment.

    I work with a lot of people in this category that start the conversation with something such as "I am worried I won't have enough super to retire".

    "Building towards gate 1" clients are absolutely the ones that keep me awake at night in that I know how incredibly important each step is to get just right. But they are also so incredibly rewarding as you see each building block fall into place and make way for the next one. :D
     
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  9. DiligentPM

    DiligentPM Well-Known Member Business Member

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    Mutual trust (earned) and respect is critical with who I target to work with....Keen to hear from experienced entrepreneurs re: proactive strategies to target your preferred client profile ...for small businesses with tight resource constraints it is imperative to be able to identify early on time wasters, individuals who ask for a lot with no intent to commence a business relationship etc...critical to identify early indicators of individuals who devalue or value a service...to minimise the 80/20 Pareto Principle becoming a reality...Some businesses experience staff turnover when there are rude or over demanding clients etc...Keen for us to share what proactive strategies entrepreneurs engage in to minimise high maintenance low profit clients to maximise outcomes and retain staff
     
  10. DiligentPM

    DiligentPM Well-Known Member Business Member

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    Yes, several highly successful business owners have advised me that good clients value a service and its critical to not drop rates as this devalues the service and places a business in financial risk over time....I wonder if people from cultures that engage in always haggling for a bargain bring that philosophy here?
     
  11. Esel

    Esel Well-Known Member

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    Were these tips helpful @DiligentPM ?

    1. Avoid whole races.

    2. Avoid all stay at home mums.

    Biz - How do you know if these women are part time, working from home, mat leave, job share, flexi time or even have kids? What about guys at home with kids?

    And lastly, why does your business attract/create so many customers who are unhappy and unwilling to pay full price for your product/service?
     
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  12. Esel

    Esel Well-Known Member

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    Im not a business owner so i havent seen it from your perspective.

    Which cultures/races do you and @Biz find are always haggling for a bargin?
     
  13. DiligentPM

    DiligentPM Well-Known Member Business Member

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    That is a good point...if the service is poor one needs to advocate which places you in the high maintenance quadrant temporarily until the matter is resolved...I think the high maintenance client to minimise in a business is one whose profile reflects ongoing high maintenance behaviour when there is good service, a general lack of respect for the profession/service, no or limited trust, unreasonable demands, lack of boundaries e.g calling staff on Sundays as one example, never acknowledging good work to name a few behaviours
     
  14. DiligentPM

    DiligentPM Well-Known Member Business Member

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    I have not personally had that experience...I am making a reflective comment that I wonder if some ways of doing business eg haggling for a deal might be reflective of some cultures eg. When on holidays I have experienced this in other countries
     
  15. DiligentPM

    DiligentPM Well-Known Member Business Member

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    This is a wonderfully inspiring post. Thank you for sharing...it clearly describes a client profile to strategically market to
     
  16. Xenia

    Xenia Adelaide Property Manager Business Member

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    I'm a small business owner so know all my clients personally, know all my properties well and can easily build rapport with people. I don't have too many high maintenance clients because I tend to identify them quickly and weed them out so that I can dedicate more time to my good clients.

    Level 4 clients cause staff burnout and need to go (unless they are selling in the near future and there is some light at the end of the tunnel :))
     
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  17. Meisterin

    Meisterin Member

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    I also tend to avoid certain races and people of certain profession. What I mean by avoiding I give "higher" quotes to start off with to build a buffer should they want to haggle to account for "extra" hours and stress I foresee later down the track. If they take the higher offer then they become no. 2 type client if they become a regular.
     
  18. Esel

    Esel Well-Known Member

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    Despite all the hinting and winking, ive still got no idea which are the haggling 'races'?

    What kind of professions do you avoid?
     
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  19. Biz

    Biz Well-Known Member

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    A lot depends on the business and value of the transaction but I virtually never drop my prices. I have tested this quite a lot and found 9 times out of 10 they buy anyway.
     
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  20. Biz

    Biz Well-Known Member

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    Lol yep, I used to deal with a project home builder who did the same, when these customers would come in they would order a tender and then any add ons he would double the usual already high add on prices and then show a big discount. Only way to keep them happy!