How To Find High Margin Ideal Clients (1 of 3)

If you want to FIND, WIN, KEEP and GROW more Ideal Clients who value what you do and are willing to pay for it, you need to answer these three questions;

  1. Who is my Ideal Client?
  2. How do I get in to see the decision-maker?
  3. How do I sell on value and not on price?

Ideal Client List

In this three-part article I’ll give you some practical answers that you can start implementing immediately. These are the exact same customer development strategies we are currently using with our private clients.
In this first of these 3 articles, we will focus on answering one question…

… Who is your Ideal Client?

In order to answer that question you need to first look at who your current best clients are. When you look at your customer base – who are your 10 best customers that you would like more of?

It’s likely that they are some combination of your biggest spending clients and your high margin clients.

These are NOT necessarily the same thing.

Some of your biggest spending clients may not be your highest margin clients.

Also consider the product/service mix. What mix of products and services do you want your Ideal Client to buy from you?

Your objective is to create a list of around 10 customers who represent the right mix of revenue and margin – combined with the right product and service mix.

With that list in front of you, you’re going to ask 4 sets of questions.

1. GEOGRAPHIC

First, you need to decide on the geographic range for your Ideal Client. This is simply a matter of asking yourself how far you are willing to travel to do business.

For example, when I started this business a number of years ago, my children were quite young. I decided that I wanted to be at home in the evening with my children and not staying in hotels.

I set a maximum travel distance of two hours when I looked at the ‘geographic’ criteria.

That is a very important, yet very simple, decision that you must make.

2. DEMOGRAPHIC

Demographics are observable data points about a company.

These are criteria that you can use to search a database such as a Dun & Bradstreet. Example demographic data on your potential Ideal Client might include; annual revenues, percentage growth per annum, profitability, industry sector i.e. retail, number of locations, number of staff, et cetera.

3. BUSINESS UNITS OR SERVICE UNITS

I use the term Business Units and Service Units to describe the buying characteristics of functions within your Ideal Client.

BUSINESS UNIT: These people will tend to buy on value – if you know how to sell to them.

You will know they are a Business Unit if their department/business function is involved in generating customers and selling more of their products and services to those customers. Sales teams, marketing departments, customer service functions and senior business leaders would all fall within this group.

SERVICE UNIT: These people will tend to buy on some combination of price, service and quality. You will know they are a Service Unit if they are an internal function within the business. Purchasing, HR, and IT would be examples of this group.

It will often be the case that you have to sell to both groups of people. However, one of them will be the primary buyer and you need to know which one it is.

If you want to sell at premium pricing and get out of the commodity trap, you must master the ability to sell to Business Units.

4. BUYING INFLUENCES

The final and fourth question we have to answer, has to do with who the Buying Influences are.

In most B2B selling situations there are multiple Buying Influences. If you are not selling to all of the buying influences, you’re unnecessarily giving away a competitive advantage. And you are certainly sacrificing margin.
There are 4 primary Buying Influences in B2B selling. We are going to concentrate on just 2 of them here.

BUSINESS BUYER: The Business Buyer will typically work in a Business Unit i.e. it may be the marketing director, managing director or sales director. They will make value-based buying decisions if you know how to communicate your value to them. The ROI is far more important than the cost of the commodity. If you want to protect your profit margins you have to know how to sell to Business Buyers.

TECHNICAL BUYERS: These people are screening potential sellers in and out based on technical criteria. Examples of technical criteria can range from quality and service standards, pricing, delivery, IT compatibility, ISO standards, et cetera. Their goal is to commoditise what you do and buy your product or service as cheap as possible. The purchasing department would be the classic example of a Technical Buyer.

Your salesperson/sales team should be 95% focused on an agreed list of 100 Ideal Clients. This 100 Ideal Client list should have similar characteristics to your current best clients.

Your salesperson/team should avoid getting distracted with opportunities that are not on this list.

This 100 Ideal Client List will help them get clear about who to say YES to, and who to say NO to.

In part 2 of this article, we’ll look at some practical things you can do to get meetings with these Ideal Clients.

FREE Resource: I produced a special CONSULTATIVE SELLING CHEAT SHEET that I give my private clients to use. It will help you to have better selling conversations with your Ideal Clients. You can download it for free using this link.

(Consultative Selling Cheat Sheet)


Join the Discussion!

Let us know what you think. Or ask us anything. Or offer your own sage advice.

The only rule: RESPECT THIS HOUSE! Postings that contain abusive language and/or personal attacks will be cheerfully VAPORIZED. One cross word and – POOF! – your well-thought-out post will be gone in a puff of smoke.

Nick


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