We’ve all heard the cliché: “If you try to be everything to everyone, you’ll be nothing to no one”. It may be cliché, but it’s so true.
One of the single biggest marketing missteps I see among struggling small businesses is that they don’t know who their “Most Profitable Customer” is. By just aligning your business around your Most Profitable Customer, you can immediately begin to see more profit with less effort.
In this article, I’ll give you two personal examples of this principle at work and 5 high impact areas to take a look at in your business.
A couple of weeks ago our family kicked off one of our favourite family activities of the year: Camping. It was cold and rained threatened, but that doesn’t matter to us. We’ve been itching to go camping for some months now. We have a favourite spot that we love to go to…it’s a hidden gem for tent camping with lots of space and privacy.
Boy, were we excited!
And then it happened. We got news that our favourite, hidden away spot was being converted to a luxury lodge the day after we check out. And many of their other tent sites are being converted to RV spaces.
Our favourite camping ground was being taken away from us. You need to understand…we’re regulars there. We get hugs and warm welcomes from the owners when we arrive. We’ve got history!
But none of that matters. This is business.
Being a business guy, I couldn’t fault them. This move to convert tent sites into luxury lodge and RV sites was excellent business strategy. The reason we loved our spot, is because it was hidden, forgotten. No one else knows about our secret spot. What was really good for us was lousy business for them.
They run at capacity with their RV sites and often have to turn away RVs because they’re full and yet all those tent sites sit empty.
Who’s their most profitable customer? RVs!
By understanding that tenters are unprofitable customers, they are able to make smart business decisions and align their camp grounds accordingly. They will increase their profits!
Sometimes You Need To Turn Away the Big Customer
It’s not just about turning away unprofitable customers. Sometimes you need to turn away the customer who’s waving big dollars…
I was recently invited to bid on a very large, very public, very lucrative web design project. I respectfully declined. I knew that if we were to try and bite off this project, it would stretch our resources, overwhelm our capacity, distract us from our longer term goals and hurt our existing customers.
Could we have pulled it off? Probably…but at what cost?
We’ve geared our marketing, our project management, our pricing and our processes around serving the small business owner. We’re working on becoming a world-class small business web design machine!
We understand who our Most Profitable Customer is: small business and we think twice before straying from that.
Aligning Your Business For Profit
There are web design companies out there that have aligned themselves with the “cheap, overnight” template driven websites. Some web design companies specialize in the high-end enterprise Client. We specialize in small business.
All of these companies have different target markets. Each can be very successful if they understand who their Most Profitable Customer is and design their businesses accordingly.
By understanding who your Most Profitable Customer is, you can align everything about your business around them. The better you align, the more profitable you’ll be.
If all you do is born out of a desire to identify, attract and retain your Most Profitable Customer then yours will be a successful Business.
3 Question Test To Determine Your Most Profitable Customer
You want to look at which group of Customers:
- Do they exist in plentiful enough numbers?
- Are they a pleasure to do business with?
- Will they buy what I’m selling at a price that gives me a reasonable profit?
Where To Start Positioning Your Business
We find that the process of creating a world-class business that is optimized around your Most Profitable Customer is an ongoing one. Perfection is an elusive goal. Be practical and go for progress…so that you are continually sculpting your business around your Most Profitable Customer.
Here are 5 high-impact places to start:
- Your Branding. Make sure your logo, your colours, your business name are all designed to resonate with your Most Profitable Customer. If your image isn’t right, don’t be afraid to reinvent your business branding…the sooner you do, the sooner you’ll begin to attract more business.
- Your Website. Make sure your small business website reflects your branding and “meets your Customer where they’re at”.
- Your Pricing. Remember, you need to be able to charge a price that gives you a reasonable Profit. This isn’t your “Most Busiest Customer” or your “Most Time Consuming Customer”…this is your “Most Profitable Customer”.
- Your Marketing Channels. Are you taking your marketing to where your Most Profitable Customer is? Don’t confuse spending time at the wrong marketing events with marketing…Reevaluate your marketing efforts.
- Your Message. Tony Robbins talks about “clarity is power” and he’s right. Make sure the words you’re using to talk about your business are the words your target market is listening for. Speak in the language of your “Most Profitable Customer”.
Align your business around your Most Profitable Customer and you’ll immediately begin to see more profit with less effort.
(Now I need to find that Parry Sound campground that specializes in luxury tent sites!)