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What does the ideal customer look like for your business? Your first answer might be, ‘Any customer that’s willing to pay me!’ While that reaction might be expected in the early days, having a clear understanding of what drives your customers, the problems they want to solve and their core values could be the difference between startup failure and success in the long term.

The secret to understanding your customers is first understanding who you are as a business. By that I mean developing a clear business philosophy.

A strong business philosophy grounds your business and while it may not be overt, it subtly drives everything you do. Your philosophy personifies your brand. Certain brands attract certain types of people and if your brand is a true reflection of who you are, what you stand for and what sort of business you want to create, then it stands to reason that only customers who want to work with such a company will approach you.

Why does all of this matter? Because clients who love what you stand for are more likely to be loyal to your business over the long term. They are also much more likely to tell others about your business.

Attracting the right kind of customers

As your business grows, it is important to be clear about the type of customer you want to attract and service. Having an “ideal client” profile allows you to make better-informed decisions about whether to do business with a particular customer or not.

One of the tools I have used to find the right customers and protect and enhance the brand power of my businesses is a customer screener. A customer screener is simply a list of key attributes that you want to see reflected in your potential customers. It might sound like a luxury, but screening customers prevents you from wasting time seeking out, selling to or doing proposals for customers that are in your wrong target market, aren’t profitable or don’t build long term value into your business and brand.

Here are three elements to consider when formulating your customer screener:

 

1. Value alignment

You may want customers that fit with your brand and values otherwise, you may find it hard to work with them. For example, you may choose not to work with a cigarette company or arms company if you personally feel strongly about those issues. Value alignment is becoming increasingly important for both businesses and the customers they serve.

Thinking about this alignment can also help you improve your ability to make decisions, what I call decisionship. For example, one of your values might be to emulate the quality of Rolex. If you were then approached by a would-be supplier who says they can offer you components for a fraction of what your current supplier is delivering for but they are not of the same quality, then the answer is clear. If you are keen for your business to have a social conscience and do no harm then the same offer may be turned down because of the working conditions of employees in that business.

2. Budget

You may choose to screen customers by the amount they are willing to pay for your product or service. A common budget-focused screening tactic would be an application fee to eliminate those who aren’t willing to invest upfront.

One of the entrepreneurs that came through my program had a self-publishing book business. It attracted lots of potential customers but it turned out many just tire kicking. They didn’t have the money to publish their own book. Hoping to reverse the trend, she started telling prospective customers the minimum cost and range upfront. Those who weren’t serious backed off. This saved her wasting a huge amount of time with customers that were probably never going to use her service anyway.

3. Expectations

One of the challenges businesses face is continuing to meet high and ever-changing customer expectations. Unrealistic expectations around things like deliverables, metrics or timeframes will almost always result in future grief and conflict. So, you may choose to select only customers who have realistic expectations about what can be delivered.

While at my first business Blueprint Management Group, one of our biggest customers was steadily running the team into the ground with unreasonable demands and expectations. We ended up ‘firing’ that customer due to the impact on our team. When the business underwent management changes, they ended up coming back, ready to take a new approach. It wasn’t necessarily an easy decision to cut ties with a major customer but in the end, sticking to our values turned out to be the right path.

There are other factors to consider when screening for the right customers, such as demographics and the potential to grow. As you get clear on your own customer screener, you will automatically gain clarity on your niche, which will only help you better focus and win your target market.

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