Time and time again I hear people tell me they struggle to define their Target Market. Having a ranking system for clients is the first process I encourage them to do.
Not all clients are created equal. Think of the 80/20 rule. You KNOW there are some clients that take up a lot of your time but deliver little revenue. Strangely, the clients that bring in the highest revenue always seem to occupy less time per dollar.
By ranking your clients into Bronze, Silver and Gold clients based on revenue/hour, you’ll quickly identify the similarities that your best clients have in common. These may include location, face to face time required, size/stage of business, work undertaken for them, repeat business (which is akin to lifelong value) and time expectations.
Make a list and brainstorm with your team (or by yourself), do it on paper or a whiteboard. I use butchers paper and post it notes and place them around the walls. It’s messy, but quickly some trends will be apparent.
Once you’ve noticed that there is a whole cohort of clients that deliver you the best return on your time, these are the clients that you should concentrate on as your ideal Target Market.
You need to then ascertain WHERE these clients originated from. Once you are clear on that, you’ll know where to invest your marketing budget. If they come from Networking, spend more time developing your network. If they are referrals, consider putting in a place a referral programme (and always thank the referee). If they come from online, invest more of your budget there.
Having completed this process, you can now focus on generating more of these “Golden” clients. There are two ways to do this. Invest in acquisition strategies, or if your Silver clients can be, move them up into the Golden realm. You will need to be brave and start to ‘retire’ bronze clients. If you’re brand new in business, this can be scary, even for established businesses, this can be hard. But ultimately you’ll free yourself up to work with more Golden clients and convert Silver to Gold.
This is an evolving process. The more you go through the process, the clearer it will become to you who your ideal Target Market is. Today’s Golden client may well be tomorrow’s Bronze client. In fact, if you are really sharp at defining your Target Market, you’ll be so laser specific in time that you only work with the best of the best – clients that today you can only dream of working with.