In a perfect world we’d all have 100 percent customer retention. Every person we agree to do business with is a perfect fit for us and we are a perfect fit for them. We will stand and deliver our products and services with integrity and they will experience the optimal return on their investment. Over time we establish trust and credibility and might occasionally become friends. They’re not going anywhere—or are they?
I’m not a math scholar but I’m pretty good at basic equations. Here’s one that most business owners and sales people are counting on:
Qualified Prospects + Need/Interest = Ideal Clients.
Now let’s agree to a few assumptions:
- You believe in your products and services.
- You can easily and passionately explain their benefits.
- Your prospect needs and wants your products and services.
- You follow through and deliver on everything you agree to do.
- You connect with them as appropriate (weekly, monthly, quarterly).
Based on living up to the “givens” listed above why aren’t all of our clients staying with us forever? I recently lost two clients so I began to consider some of the variables that may have affected my not-so-positive outcome. I could honestly answer “Yes” to all five of the givens. If it wasn’t me . . . who could it be? Them? So I made a list of the top 10 characteristics (with brief descriptions) of my target market:
- 5+ Years in Their Industry – Survived Start Up
- 2+ Years at Same Company – Achieved Measurable Success
- Business Owner/Top Producer – Invested in Building the Business
- Entrepreneurial Mindset – Visionary & Calculated Risk Taker
- Life Long Learner – Invest In Their Own Development
- Coachable – Knows They Don’t Know Everything
- Established in Their Industry – Teaches and Trains Others in Their Field
- Passionate – Completely Believes in Their Products/Services
- Wants/Needs Referrals – Understands Referral Marketing is a Science
- Positive Cash Flow – Able to Budget/Invest Based on Their Goals
What are the top 10 characteristics of your target market?
My most successful clients have nine or ten of these traits. The two I lost only had two or three. My lesson learned: If a qualified prospect does not match most of my descriptors they’re not a good match for me. The proven equation looks something like this:
Qualified Prospects + Top 10 Traits + Need/Interest = Ideal Clients
Just because they need (or want) my product or service doesn’t mean they’re in a position to experience the maximum benefits. Most importantly, just because we’re not a good fit in business does not mean we’re not a good fit as friends and colleagues.
One of the most selfless things we can do when we’re talking to an unqualified prospect is refer them to someone that can help them with their most immediate needs. Ideally, they’ll develop into a qualified prospect over time by acquiring the skill set of your target market.
One last variable to consider: Could some of our most successful clients become less than ideal clients by allowing their abilities to diminish? Absolutely.
Perhaps the goal shouldn’t be to attain 100 percent client retention. The goal is to serve people that meet 100 percent of your target market requirements in an effort to serve them to the best of your abilities.
Paula Frazier is a referral marketing expert for Referral Institute and has helped thousands of business people create millions of dollars in qualified referrals over the last nine years. As a published author she’s also acknowledged in the New York Times best seller, Truth or Delusion – Busting Networking’s Biggest Myths. Check out #33, Delusion with a twist! Paula can be contacted at paula@referralinstitute-va.com
12 responses so far ↓
1 Bill Figaro // Feb 15, 2010 at 10:28 am
Paula, this is right on! One of the things I enjoy most through your Referral Institute curriculum is the ability to make what appears to be difficult issues very, very easy to understand ….. with easy implementation!
You rock!
2 Holly Andrews // Feb 15, 2010 at 10:33 am
Love it! Not only does staying within your ‘target market’ make your life easier through retention, but because they have the key characteristics of a qualified client… they are easier to work with too! Makes perfect sense to me… It all comes back to: ‘it’s the uncommon application of common knowledge’ (Thanks Dr. Misner)! Great article Paula!!
3 Melvin Adams // Feb 15, 2010 at 11:41 am
Paula – I think your last paragraph says it all when it comes to profitable referrals. Probably the thought could be summed up in the word “compatible”. The challenge for all of us is to be purposeful enough in our work to recognize those who are really compatible or could be and those who are unlikely candidates. Thanks Paula for “switching on the light again”!
4 Celie Holmes // Feb 15, 2010 at 11:45 am
I really like this Paula. What a great way to make sure our potential clients are well served: either by us or someone whose products & services are a better fit.
This is why I think that it’s so important to build relationships with our competitors as well: we then have someone whom we trust that can take over where we might need to let go. I always enjoy your insights and find your articles valuable and timely. Thank you!
5 Rachel Waddell // Feb 15, 2010 at 2:23 pm
A good reminder that we ALL benefit when we give up the scarcity mentality, recognizing that there is “enough” to go around, and that sometimes we are not the best suited to serve a client’s needs. Keep your eyes on the prize–your target market. And know the target market of your referral partners as well.
6 Laurie Mrva // Feb 15, 2010 at 3:05 pm
As they say, the proof is in the pudding! Thank you for reminding us all to stay focussed on what we do BEST! Having GREAT fit clients makes everyone happy. The client is getting results and the service provider excels at helping them reach those results, making EVERYONE look good.
7 Mark Sendrick // Feb 15, 2010 at 3:57 pm
I just had two meetings with my financial advisor and we talked about this exact subject. Target market is key to increasing and retaining your business. Thank you Paula for another well written column.
8 Paula Frazier // Feb 15, 2010 at 5:12 pm
Thanks to you all for your feedback and incites!
9 Sherry DuShaw // Feb 15, 2010 at 6:07 pm
This is a great reminder of the importance of building relationships with our clients because if we can find needs, then we can build value either with our own products and services or referring them on to someone else who can better meet the need. Either way we both end up being winners.
10 Neal Frazier // Feb 15, 2010 at 8:12 pm
You also taught us in Referrals For Life that a select target market can ensure success in any economy. Knowing who you want to meet and educating your referral partners is key.
11 Toni Freeman // Feb 17, 2010 at 10:12 am
Paula, this is a great article! It motivated me to specifically define the qualities that I seek in my ideal business partners. Now that I am armed with this information, I can do a better job identifying those individuals who have a greater chance of experiencing success with my company. Thanks for all you do to help the “Lifers” excel in our professions!
12 Mark Storey // Feb 23, 2010 at 11:27 am
Paula,
What a wonderful insight for businesses! Instead of trying to conduct business with every business, conduct business with every -right- business! Qualify, qualify, and qualify again!
Thanks Paula!
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