I’ve noticed while coaching small business owners that if they take the time to identify their ideal customer they start to see an increase in business – not just in new business, but in business from current clients. Let me describe a tool and a process I use to work with my clients to double their bottom-line profits. This is simple if you realize that an increase of as little as 10% has the potential to double your profits.
I usually have my clients with existing business make a spreadsheet including:
- • All current customers
It is important that you keep track of all your existing customers using a tool such as CRM (customer relationship management software) that tracks every interaction – sales, service, questions, follow up, etc. with all customers. All of these interactions provide valuable insight for building your business.
- • Products and/or services used by existing clients
By adding a column that lists all the products and services each of your current customers are using you are able to see where there might be gaps in products or services that naturally go together. This will give you a look at potential upgrades, downgrades or cross sells for other products or services.
- • Potential for upgrade, downgrade, cross sell
This column is essentially the list of products NOT being used by a customer which then becomes potential for upgrade, downgrade, or cross sell.
- • Income or revenue range
If your customers are b2c you’ll need to know what their income bracket is to help you target a price range of products or services as well as ability by income to do additional business with you. If your customer base is b2b you will need to know what their annual revenue is to target their ability to afford your services.
From this spreadsheet we identify
• What does the small business owner want to do more of?
Of all the products and services that you offer what do you or your employees really like to do? What is easy and quick to do? What is cost effective with a good mark up? By focusing your marketing efforts on these products or services you or your employees natural passion and enthusiasm will attract more business.
• What does the small business owner want to do less of?
Many times you might find that you or your employees actually avoid the products and services you want to do less of. Identify these so that you can make some decisions as discussed below.
• Of the work that the small business owner wants more of – what are the attributes (demographics / psychographics) of clients who would be ideally suited for these services based on the current customer base? Who are the customers that you serve with your favorite products or services? Analyze the attributes of these customers to discover what attributes contribute to their decision to do business with you.
- • Of the work the small business owner wants to do less of – what can be…
- You may have a particular product or service that you would like to do less of in the course of doing business. Sometimes small business owners procrastinate in areas of product or service where they feel less passionate. That’s a good time to decide and take action to automate, delegate or eliminate the product or service.
- • What is the next logical product or service not currently being used that should be promoted to existing customers?
By creating a list of what your current customers are using as well as what they are not using of you can create a plan to upsell, down-sell or cross-sell another product or service.