If I showed you a photo of a really doctored car with a big spoiler with lots of fancy (and expensive) equipment, would you get excited or find it annoying? Would you drool over it and want to know more about it and would you die if you could drive it? Or would you think this was too garish and unnecessary to the point of being rejected? Both states exist within your customer base …
“Not all money is good money.”
Let me get straight to the point, not ALL of your clients want the SAME experience, like the same things, or want to be treated the same. Customers, like the cars I described above, are very different. If your customers aren’t all the same, they need to have an experience that works for them … or you may be selling to the wrong customers. Wait … what are you saying, all money is not good money? No, not all clients are the right clients. While this may sound contradictory to what we were taught in business school, it is actually more true today than ever.
If we want customers who love the feature-rich car, then we have to search and find as many as we can as a company. We too, on the other hand, need to “fire” or “eliminate” customers who have no interest in this type of car … even if they want to pay us money for some of the products or services we sell.
Let me give you a slightly different example that everyone can relate to … going out to dinner. Some people love going to very fancy restaurants where they take care of you impeccably, have amazing food, treat you like a king or queen and allow you to spend 4 hours dining with them. Another group hates the “over the top” decor, atmosphere, snobby staff, expensive food, and time for dinner. You can’t serve both or you’ll annoy at least one (if not both) of your audiences and lose more than just customers.
“You need to make a decision … and do everything you can to obsess over the customer.”
The above examples may seem somewhat simple, but I would challenge you to look at your own business and I think you will see a lot of similarities. Most of the time when I challenge a company to look at their customer base, we find these kinds of crazy differences in the customers they serve. In addition to being a bit surprised, leaders often see a large discrepancy in their customer base. This needs to be addressed if they want to become capable of “OBSERVATIONS” (getting their customers to tell others about themselves) and obsessing over the customer.
Upon closer inspection, the other thing that most companies discover is that revenues are very different for different types of customers. Even if one type of customer only contributes 5% or 10% to the revenue base, the company continues to serve them. When this is the case, two things happen … they are “over-serving” or “under-serving” this type of customer based on the experiences they provide.
Going back to the restaurant example. If the restaurant allowed people to come in and enjoy all aspects of their expensive experience, but had to offer it at a significant discount to attract them, they are “over-serving” this audience. When this occurs, there are some significant ramifications that occur …
- The restaurant generally loses money on each customer because its overhead is designed to provide an “over the top” experience that is a fixed cost … so lower revenue means lower profitability per customer.
- The wrong customer will still not be happy, no matter the price, because he never liked all the fancy atmosphere and surroundings in the first place, now it is cheaper, so it fits his budget.
- The other types of clients (the ones who love this type of environment) will see that there are different types of clients coming in that may not “fit” their estimate and therefore their own personal experience may be compromised.
- Since this type of wrong customer doesn’t love this atmosphere and experience, there is no way they will go out of their way to tell others how amazing their restaurant is … they don’t believe this is the case and they only visit because it has a lower price right now
- And if they went out of their way to tell others about their restaurant, what kind of potential customer do you think they will tell you … exactly the same kind as them (people know people like them) … and these are the customers. you don’t want more because they just want cheaper prices, not the atmosphere and experience it’s designed to provide
While there are several other reasons why this is not a good idea, hopefully this gives you an idea of why there are “wrong” clients and “right” clients. Take a look at your own business … are you serving some “wrong” customers that maybe you shouldn’t? Do you get a small percentage of the income from a group that does not fit the experience for which it is “built and designed”? If there are, I encourage you to reconsider this situation (for the reasons above) and possibly remove them from your income base.
Once you fire the “wrong” customers, you now have the opportunity to “focus on the right customers.”
This is one of the biggest advantages for an organization that really understands who its “right” customer really is … they can go find more of them. When an organization isn’t distracted by serving the wrong group of customers, it can spend more time serving the customers that they really want and are designed and built to serve. Compared to the restaurant example above, if this restaurant were to follow this thought process, it could eliminate low-paying customers looking for deals that don’t care about their environment and are more focused on attracting “full price” customers than they love their experience.
Don’t change your experience from what makes you the most money … change the customers who keep you from making the most money.
What’s important is designing and creating an incredibly impressive customer experience for the “right” audience of customers … the ones who want more. Create this experience to be amazing and designed for your ideal customer. Then do more … add more value to this audience because they will appreciate it, want more, pay, and most importantly, do their best to tell others about you and the experience. In a relatively short period of time, you will have more suitable customers, which will make you more profitable.
What to do next …
Start by taking an inventory of your existing customers, including revenue, products / services, how many there are, and their profitability for your business. This will only be revealing. Then take a look at your customer experience and see what type of customer is designed to serve the best. I can almost guarantee that there will be some misalignment here … this is where you start making changes. If you haven’t yet designed an incredibly amazing (and consistent) customer experience for this audience, this is the first place customer-obsessed companies start.
There is a process for this to happen. If you want to save some time and get to the core quickly, let’s have a coffee (or a lunch or a phone call) and I can speed up the process and give you insight into what you need to know to make it happen in your company. Coffee (or lunch) is in you … information and education are in me. My goal is to help you save TIME in the process if you are interested in becoming obsessed with the customer and becoming a capable “REMARK” in the process … which is my passion and goal for every company on the planet. Great goal … but start with one.
The only question that remains is: “Are you ready to obsess over the customer and become ‘REMARK’ capable?”
