A lot of business owners don’t realize that they have almost total control over who their customer is and how much money those customers are willing to spend. Once you understand this and start to lean into what you learn, you’ll sell more product for more money with less effort and lower costs.
It’s not hard to lose control of your customer base. When your company is at the startup stage, it’s only natural to scramble to get anyone to buy your product, discover that it’s awesome, and , if you’re lucky , tell someone else how awesome it is.
Sure, you target markets, you do surveys, you narrow down your pitch to certain demographics. But the only demo that matters is: “Has cash and wants our stuff.”
That’s the roadmap to early-stage survival. But like I tell my kids, “The road to success starts with telling someone, ‘No.’ “
In the business world, that translates to: Until you stop trying to serve everyone on the planet in the hopes that the percentages game will someday work in your favor, you continue to cripple your business with hit-or-miss strategies, unrealistic expectations, and painfully slow growth.
The solution can be found in your customer base. And the strength of your customer base is a reflection of how well your business performs for that base. You are in control.
Now, there’s no million-dollar top-secret 12-step plan to figuring out how to wield this control, but it boils down to targeting “better” customers instead of “more” customers. Here’s how you can get started.
1. Don’t strafe your target customer, take dead aim.
It seems counterintuitive, but the first thing to do is narrow your product’s messaging, positioning, and definition.
Your product has to be a lot of things to a lot of customers. So when you aren’t confident that your product directly serves a large enough market, you’ll tend to open up your aim to a broader market, and you’ll end up targeting no market at all.
An overly broad message doesn’t speak to anyone. A wide positioning just confuses potential buyers across a lot of various categories. A long feature list may lead you to believe your product will find a wider audience, but you risk never being the right solution for any single use case.
Instead, have faith that if you pitch and serve one customer amazingly well, other customers will conform to your product, not the other way around.
2. Don’t overspend on customer acquisition, prioritize retention.
The customers you have are infinitely more valuable to you than the customers you can get.
No matter how many customers you may have, it’s likely you’ll never believe it’s enough, because for every new customer you acquire, there are thousands or millions more out there waiting to be acquired. So there’s a tendency to be super-aggressive with customer-acquisition plans, and you wind up guessing about which plan worked and why.
Instead, grow from the inside out. Pay attention to your existing customers. Understand why they became your customer. Learn how they’re using your product, and most importantly, discover what they’re not using it for and why not. Then remedy that.
In other words, rather than build your product to serve customers you don’t yet have, refine your product to better serve the customers you do. The more loyal they are to you, the more focus you should give them.
3. Don’t keep bad customers, flush them.
The customer is not always right, and when they’re wrong for you, they get expensive.
I used to get frustrated every time a customer left me or any time a customer prospect didn’t buy my product. These days, I’ve become immune to it, and with good reason.
The ever-deepening expansion of business into the digital world has not only opened up a startup’s reach to exponentially broader markets, it has opened up access to insight about how valuable those customers really are.
Now you can hit much wider prospect audiences, and because of that, rejection and churn rates can climb much higher. The only time I get concerned when I lose a customer or potential customer is when they were a high-value customer or prospect, a scenario which, actually, is rare these days.
Further, when I do lose a high-value customer, there’s almost always a lesson to be learned. I can dive into their usage and see where they became disengaged. I can usually contact them and figure out why things went wrong. Then I can fix it.
Once you get good at that, you can be proactive about spending less energy on low-value customers and cater to your high-value customers. You wind up with lower costs, higher revenue, and higher profits. All for doing a little less.
Source : Inc.com