There is no denying it. Business conditions in Australia are tough. Business closures are commonplace. It was not that long ago that a medium sized business in our complex closed down overnight.
Have you tried listening to the excuses of the owners when their business fails? Some excuses are competition from overseas, bad debts and rising costs but very few business owners put their hand up to blame themselves.
When it all boils down to it, most business problems can be solved by having the right customers. Be honest with yourself. Are you really happy with your customers? Here are seven questions to test the quality of your customers.
- Are your customers responsive to your marketing?
- Are your customers insensitive to price increases?
- Are your customers unresponsive to special offers from your competitors?
- Do your customers make relatively large purchases?
- Do your customers buy often?
- Do your customers buy more than one product or service from you?
- Do your customers pay upfront or within your agreed credit terms?
At first glance, you might think this is impossible. Well, if you think that is the case, most probably you do not have the right customers for your business. You should strive to have many customers that can answer yes to all of these questions. One way of acquiring such customers is through Bartercard. And the great advantage of Bartercard is that marketing is included in your membership. You can submit your ad to your trade co-ordinator and it will be read by hundreds or even thousands of members.
My company has both cash and trade customers that fit this ideal customer. Of course, we also have customers that make one-off purchases or only buy one particular product from us.
What has to be done to find these ideal customers?
The quality of your business is determined by the quality of your customers, not the quality of your staff or products or building that you work in. Business is all about your customers.
Before you can attract the right customers, you must have a plan in place and you must start at the beginning.
Firstly, you must identify what your ideal customer looks like? Is it an individual? Is it male or female? Is it a business? If so, what sector is it in? Is it small, medium sized or large? Where are they? Are charities, clubs, government departments or other organisations amongst your list of ideal customers? The best way to start is to examine your customers and in particular your top 20% of customers which are likely to bring in 80% of your sales.
Secondly, you have to create a marketing message that both retains your ideal customers and helps you acquire more of them. That means creating a Unique Selling Proposition which makes it clear to your customers and prospects why they should do business with you ahead of every other option available to them.
Thirdly, you need to nurture your preferred customers by communicating with them regularly and in such a way that attracts them to your business and at the same time repels other customers. A big mistake I see many business owners make is to try and be all things to all people. If you do this, you end up pleasing no one. This means attracting a group of customers that want to do business with you and no one else. To do this you need your customers to be perfectly matched with what you are offering and what problems you are solving for your customers. You will know this soon enough by how quickly and how often they respond to your marketing.
There are numerous examples of businesses attracting only their preferred group of customers. BMW’s slogan is the Ultimate Driving Machine”. Its slogan immediately appeals to those that enjoy the pleasure of driving a motor car and repels those who want an inexpensive and durable motor vehicle that is easy to park in shopping centres.
Finally, to attract and keep your ideal customers, you need outstanding products and services. What you also need to do is market yourself and your business effectively and innovatively and create a relationship that is very strong so that your customers will be resistant to price rises and offers from your competitors.
Start thinking about what you need to do to get the right customers in your business.
Ian Renton is the writer of his fortnightly ezine, SmallBizTips, now read by approximately 10,000 subscribers and his monthly printed newsletter, Keep Your Customers For Life.
Ian is the author of Debt Collection Made Easy, an easy guide to collecting your money quickly and efficiently as well as a thorough look at the local court system and how it can be easily used to collect money yourself at minimum cost to you.
His next book about Customer Retention is due to be published in 2014.
Ian Renton is a Bartercard member and the owner of four businesses, Australian Credit Stationers, Australian Christmas Cards, Renton's Labels and Renton's Printing. His businesses provide account stickers, Christmas stickers, corporate Christmas cards and e-cards, corporate birthday cards, thank you cards, calendars, custom labels and general printing to thousands of businesses in Australia and New Zealand.