If not, you are probably not making the most of your best clients by allowing the less important, or less profit making clients distract you.

So honestly, how well do you know the profile of your client portfolio?  

Have you ever stopped the frenetic daily routine for a moment to sit back and think about who your clients are?  Why you work with them? What contribution they make to the profitability of your business?

Sometimes it can be very interesting to do just that. You might be surprised by what you find out and you may even be disappointed.

Many businesses are so busy going about their business that they don’t find the time to think about their customers, but wouldn’t it be a good idea to ask:

  • 3D Character and Question MarkHow many clients do we have?
  • What does each client give us?
  • What do we give to them?
  • How much of a contribution does each client make towards the bottom line?
  • Are we maximizing the opportunities from each client?
  • Are we over servicing any clients to the detriment of others?
  • If we changed the mix of our clients could we make more money?

He who shouts loudest…

It’s often the case that the clients who shout the loudest or are the most needy are those that are draining a business of its precious resources which could better be used elsewhere.

Perhaps it’s difficult to face up to this because when you do find out, you then have a decision to make – do you disengage from them or is there an opportunity to turn them into a worthwhile client through conversation and negotiation around what you do for them and for how much.

Recommendation

If you haven’t reviewed your clients for a while I would recommend getting some help to do this by a professional that is qualified to analyse your business and come up with some suggestions as what your options are. It may cost you a bit of money in fees to do this but it could be a very worthwhile exercise and it may change the way that you do business in future. 

Doing this yourself can be time consuming and emotionally draining, after all, we all have clients that we prefer, but are they really the best clients for your business?


Related post from my fabulous Twitterbuddy and blogger extraordinaire, Jim Connolly : How to attract better clients

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

4 Comments

  1. Mark Barton says:

    We have probably all heard of the 80 / 20 rule. This is where 20% of your clients give you a profit. The rest – the 80% do not.
    If you turn this around only a little you get to the 20 / 140 rule. To make the profit to look after the 80%, the 20% who are profitable to your business have to provide 140% of your profits.

    For those who have been in business a short time here is the shocker:
    Put UP your prices. The result will be that you will lose those needy clients. You may love them to bits. But love them to bits outside of business time. You will be able to, as you are spending your business time in a more profitable way, leaving you more free time.

    Do I get it right myself? No
    Do I twist and turn and tie myself in knots when it comes to putting up my prices? Yes absolutely every time. Even after over 10 years it doesn’t get any easier but I know that it has GOT to be done.

  2. Toni says:

    Thanks for your very valid contribution Mark

  3. Gary Stewart says:

    A great question for any business owner to really consider. I try to relate this to my company. As a software vendor our sales are traditionally a single implementation (where we make our money) followed by ongoing support and maintenenace / support (where we lose our money)! Client may grow and order some new licences or add a new department but we are usually looking for the next new customer.

    Be useful to see how other firms tackle the same issues as a retailer, albeit with a steer to adding some services to the mix with limited repeat business.

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