Customers are everything to a business. Without paying customers you don’t have a company, you have a well structured hobby. Yet finding the right mix of customers can be an extremely challenging aspect of growing your small business.
Two articles this week tackled the issue of customer mix from different angles. In her article, Michelle Hammond reminded entrepreneurs of the importance of being selective about the work they do and learning to say no to clients. On the other end of the spectrum, Steph Auteri reminded entrepreneurs about the dangers of letting any single client make up too large a chunk of their revenue in her article.
So what’s a business owner to do? How does one remain selective and turn down potential business while at the same time making sure to never let his/her customer numbers dwindle to the point where any one customer can make or break the business? The key is staying focused on your company’s core competencies.
By staying focused on core competencies the business will be able to perform better and create a cycle whereby its selectiveness and willingness to turn down clients actually brings more clients to the door.
When you bring on only those clients that need you to deliver on your core competencies and turn down any potential clients that want you to stretch beyond what you’re best at:
- Work will be completed more efficiently because employees are experts on what they’re doing
- Work will be of better quality because the company is sticking to what it excels at
- The team will be happier and more cohesive because nobody feels stretched too thin due to expectations that they complete work which they are not good at or don’t know how to complete
and all of that makes marketing your business and bringing on new clients easier because doing your best work:
- Creates happy customers that will send you referrals and vouch for the quality of your offerings
- Creates numerous success stories that you can use as examples when pitching new clients
- Focuses your marketing so that you know exactly who to target and how to make your company shine
Additionally, if you turn down business effectively by explaining to the potential client that his/her request falls outside the scope of your core competencies and referring him/her to someone that is an expert, you will gain allies and end up creating a broad network of complementary firms that will refer business to you when a customer requests something outside their area of expertise but within yours.
As with anything else, swinging too heavily to either extreme – by accepting any potential client that comes your way or by putting all of your eggs in one basket – is likely to spell disaster for your company. Do a periodic check to make sure that you’re focused on your core competencies and that you’ve created a healthy customer mix for your company and you’ll drastically increase your chances of long term success.