At a networking meeting yesterday, all the members were asked to make an elevator pitch about their business. As part of the pitch, each member had to include “who would be an ideal referral for your business”. It was surprising, how many members responded to this with “anyone” or “any small business owner”. From attending these meetings regularly I have learned that the more specific I am about asking for referrals, the more I seem to recieve. For example, one week I asked to speak specifically to hairdressers, the next business owners looking to buy commercial property (as we can help them reduce their stamp duty). Now the reason most others don’t do that is that they are frightened of missing out on other potential introductions. However, the reality is exactly the opposite – I know, I’ve tried it!
Why the “anyone” strategy doesn’t work
The “we’ll take anyone” strategy doesn’t just apply to asking for referrals at networking events. It’s often present all the way through a company’s customer acquisition drive.
By using this strategy, you attract all the wrong types of customers, who don’t help you move towards your end business goal.
Typical examples include customers who are fee sensitive, non profitable, are a drain on your resources, don’t take your advice or who constantly scope creep projects.
If your business is full of these types of customers, will you ever reach your goals of profitability or being happy in your work?
Ok, it’s easy to say don’t accept just anyone, but it’s not that easy when you are trying to build a business quickly. However, if you can accept that the business will grow a little more slowly, then there is no doubt that you’ll see the benefits – both in terms of profitability and hassle.
How to get that ideal customer
First things first, do you know what your ideal customer looks like. What industry do they work in? How big is their business? What age group are they in?
Take time out and draw up a list of all the differant attributes that your ideal customer should possess, and take note, the list should be longer than “anyone with cash!”
You may already have some ideal customers on board. What characteristics do they have in common?
Think like the big boys here – Supermarkets, Banks and other major players all use this type of method. Once they have identified their ideal customer, they target them through marketing.
Once you have your list, you then need to work out how your service will benefit them and how you can get to speak with them.
A great example I saw of how not to do this was some time ago with a company that wanted to target Accountants. He approached me at a business networking event where I was the only accountant present (and always would be due to the exclusivity “deal” you get with the networking group when you sign up). So, by attending this meeting he got to talk to just one Accountant. Sure, he’d done his homeowrk on his ideal client type, but then had put no research into where he’d get to meet them. If he continued in this manner, it’d probably take him the rest of his business career to speak with only a small proportion of his intended audience!
Do you know what your ideal client looks like?
Your breakeven point is that point in time when your income equals your expenses. Once you get past that point and your income exceeds your expenses, then you are making a profit. If your expenses exceed your income, then you are making a loss.
