Which is better? More clients at a lower margin, with a fire-fight service and a loss of passion, or fewer clients, but a true commitment to an amazing service and a satisfactory completion of the job? I feel like the answer is an obvious one, yet so many businesses seem to (probably unknowingly) steer towards the former.
This really is irrelevant to industry, I’ve seen it across a huge range of sectors.
It is instinctive and intelligent to want more customers. Especially if you have got something really impressive; you want to push this as hard as you can, so even more people learn about you. This is particularly rife if you work against strong competition, of course you want their customers to come to you instead.
Yet, issues arise when you start sacrificing to win business, the desire to Close and see those invoiced figures rising is addictive, so chances are you start to drop your prices – offer deals and discounts just to ensure the win. A scheduled and calculated offer is smart, flippant discount is not. Here lies the huge risk that your margin will be driven lower and lower, and yet chances are that your Cost of Sale is the same. It is vital to not let that bottom line run away from you.
The two-fold to this is that suddenly you will have a small army of new clients. All of which expecting the wonderful service which you have historically delivered. But once you find yourself overstretched, a whole catalogue of issues arise. Fundamentally, there’s a good chance that you don’t have the budget to take on more staff to cover the growth or the time to personally dedicate the level of commitment each client needs, as you have been forced to lower your margins and increase your supply.
Then there is arguably the most significant problem; the risk towards the passion for what you do. As you’d be under so much pressure to keep all these clients happy and to keep all of the various cogs turning, you end up losing the love for what you are doing. This again has a huge impact on your ability to run your business and to look after your clients new and old, as well as your staff.
You could find because of this ‘sausage factory’ mentality, you end up not keeping the current customer base happy, let alone the new ones who you have over-promised to, and so it all gets a little messy, with you looking like a shark in a suit.
In my opinion, forget about volume. Forget about beating everyone in the marketplace. Try your hardest to resist the thrill of the constant win. Sit down and work out who your target market really is, and calculate the necessary ratio in terms of worthwhile/big wins, and keeping cash flow.
With this in mind, make sure you value what you do and change the right amount, if you know the work you do is worth £2,000 per month, change £2,000, not £500 just to get the sale.
Fundamentally, find a way to constantly remind yourself why you started the business you are in. Did you love helping clients or supporting them for the long game, like I do in the marketing sector, or is your passion for your specific product?
Whatever it is, make sure you build that into every new and old client and focus on that before anything else. If you’re getting this right, of course, there will still be growth, but it will be steady and consistent and attracting the clients which you are genuinely aiming for.
An ethos and mission statement should be along the lines of;
“Our goal is to not focus on fast growth, but on finding the right clients for the journey.
We focus on delivering a clear strategy and plan, with the support which the client expects and needs, getting the job right the first time.
We focus on the passion of what we do, and pass that onto our clients new and old.
We will not take clients on which we cannot help, but clients who we can see that there is a real benefit of working together.
If we can’t help, we will advise the client, as best we can, about what is in their best interest.”
In conclusion, do what is right for you and your client. Do not focus on the short-term wins, worry about your business, and your personal brand, and focus on doing it right for every client.