Are a majority of your customers as profitable to your business as they could be?
Are you 100% certain that your business is delivering 100% of what your customers really want?
Do you spend as much serving your “D” grade customers as you do your “A” customers?
As a small business owner, at times I’ve fallen into the trap of just being glad I’ve got customers… any customer. But some of my very astute business coaching clients have seen great success focusing on the profitability of each customer.
In this post, we’re covering 7 steps to creating optimally profitable customers. It’s every step you need to have a consistently growing base of raving fans who are also your most profitable fans… no matter your company size or industry.
It’s part of our SERVANT Whole-Business Model blog series – the “R” of SERVANT is for “Relationships with customers.”
7 Steps to Creating Optimally Profitable Customers
Here are the 7 steps we lead our clients through in creating optimally profitable customers for their businesses:
1. Survey Customers and Build Delivery Systems
Most business owners look at the world from their own perspective, and who can blame us? We’re responsible for every aspect of our small businesses. And it’s easy to take a head-in-the-sand approach to customer service… no complaints=satisfied customers. So it’s important to proactively uncover their real needs. Do this by either spending time talking with customers or by surveying them with a few good questions… How do they want the product delivered? What kind of boxes? When? How many? Frequency, etc. Things we as the business owner may not think about but that may be driving customers crazy.
The idea is to understand the basic foundational needs in a customer interaction and building your delivery systems around that.
2. Make It Easy To Buy from Your Firm
Next, explore how both customers and prospects interact with you, with an eye toward improving your interaction with them in such a way that it’s really easy for them to buy. The key is to sell to them the way they want to buy from you vs the way you want to sell to them. It may entail things like how you answer the phone, going from a paper to digital system, requiring an online retail system, allowing orders or order status to be visible online, etc.
If it’s difficult to buy from you, customers will stop buying from you.
3. Build Customer Service Systems
Once you’ve sold them something, you want to think through every interaction with the customer from the initial inquiry to the surveys sent after the interaction is complete. It may be how employees look or sound on the phone, whether they’re putting booties on or cleaning up after themselves, whether they’re polishing equipment they’re working on or how vehicles look…
This is about optimizing every step of the service you’re providing.
4. Identify Methods for Relationship Maintenance
This step is for situations where you may not be delivering service regularly. Maybe you service equipment a couple of times a year or for a funeral home that interacts only when another family member dies. It’s important to maintain contact with customers, that they know your people, that they feel connected to you. You want to avoid the out-of-sight-out-of-mind syndrome. Find additional purchase opportunities or other reasons to connect.
5. Identify Ideal Customer & Rank “A – D”
Here’s where you refine all of your offerings. Start by identifying your ideal customers—the ones who are enjoyable to work with, pay their bills on time, are profitable, challenge your business to get better, care about you as a vendor… whatever characteristics make them good customers. Begin to rank your customers based upon those characteristics. Ideally, you want all A customers, or at least A and B. B’s you want to improve to A. C’s you want to improve but if you can’t, at some point you’re going to want to let them go. D’s you want to get rid of.
6. Revise Customer-facing systems for “A’s”
Go back through all of your systems that interact with A customers and revise them for A customers. The goal is that your A customers are just absolutely thrilled with every interaction they have with you.
7. Create “Raving Fans” of Products & Services
Then of course you stay in touch with your A’s. Maybe you add products and services they ask for so that you create a regular supply of raving fans who go out there and talk about you to everyone they know, and who refer others to you.
While you’re creating optimally profitable customers you’re also getting free word-of-mouth marketing, both of which are good for your bottomline. But perhaps more importantly, you’re creating good will and loyal friends.
Interested to know how you can improve your system of identifying and creating profitable customers? Click here to see how we can help.