Ideal clients fuel growth
Not all clients are born equal. Some are more valuable than others – your ideal clients. And attracting ideal clients is the key to accelerating growth in your business.
The problem for most businesses is that they don't have a growth engine capable of attracting ideal clients.
Instead, sales teams are incentivized on quarterly quotas and do anything they can to hit their numbers – regardless of the quality of the business they close.
What is an ideal client?
An ideal client values what you do. They trust your advice. And they give you referrals.
Ideal clients view working with you as a partnership and want you to succeed. They are a good fit for your business in terms of their needs, budget, and buying behavior. An ideal client aligns with your company's values, goals, and objectives.
By focusing on serving ideal clients, you can increase your chances of growth and success and reduce the time and resources you spend on futile efforts.
The bottom line...
If you attract and land more ideal clients, revenue will grow exponentially faster.
One of my clients is a manufacturer of hydraulic fluids. Their "bread and butter" revenue came from bulk sales for a long time, but there were a few problems with the average bulk customer. Firstly, they didn't value the relationship; they were price sensitive and prone to moving. And secondly, the margins for bulk were much lower than small-pack products.
Their ideal client valued the product and their entire Ideal Client Experience. My client not only manufactured the fluid but also took care of everything in between – from formulation and packaging to logistics and customer training. They created a remarkable customer experience that attracted the best in the industry – clients who value their products and services.
How to define your ideal client
Defining your ideal client is essential to developing a marketing strategy, as it helps you understand your target market and tailor your messaging and offerings to meet their specific needs.
Here's a process you can follow to identify your ideal clients:
- Analyze your current customer base: Look at your current customer data to identify patterns and common characteristics among your best customers. This can give you a starting point for defining your ideal client profile.
Beware of simply sorting customers by annual revenue and looking at the top 20% of contributors. Revenue isn't the best indicator or an ideal client. Profitability, cultural fit, and lifetime value are far better indicators.
- Identify patterns: Ask yourself questions like: Does your group of ideal clients have a significant ongoing need for your product? Do they pay on time? Do they look to you for multiple products and services?
- Figure out what they like about working with you: Ask them how they benefit from your products and services. Do they value your advice? What is it they appreciate about your customer service?
- Conduct market research: Gather information about your target market through surveys, focus groups, and online research. Ask questions about demographics, psychographics, buying behavior, and pain points.
- Identify your unique value proposition: Understand what sets your product or service apart from your competitors and what your target market values most.
- Define your ideal client profile: Based on the information you've gathered, create a detailed description of your ideal client, including demographics, psychographics, buying behavior, and pain points.
- Validate your ideal client profile: Test your ideal client profile by reaching out to potential customers and getting feedback. Refine your profile as necessary based on the feedback you receive.
Forecast what your ideal client could buy from you over the next 10 years. This will give you a sense of how an ideal client could impact your revenue if you can optimize your sales and marketing engine to cross-sell all your products and services to them.
Contrast this against your 'average client.' Then ask yourself, do you want to be eating bread and butter or sitting down to a four-course meal?
But what about my average clients?
I'm not suggesting you jettison your average clients. Although, in some cases, this may be an effective strategy. I worked with a client in indoor navigation with a very diverse client base. After working on their core value proposition and ideal client profile, we decided to phase out some of the existing "bread-and-butter" business. Ultimately this led to over 250% growth in a single year... and we transitioned to an ARR business model.
In the example of the hydraulic fluid manufacturer, they turned bulk fluid down and occasionally used it to top up revenue (at a higher margin than before). But from a business growth standpoint, you absolutely must focus on building your Growth Engine to attract and maximize the value from ideal clients.
The point is simple: ideal clients fuel growth.
Once you have a clear understanding of your ideal client, you can tailor your messaging and offerings to meet their specific needs and preferences and increase the effectiveness of your marketing efforts.
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