Finding the right customers is crucial to your business. There are a few things that you need to consider when you’re thinking about who to sell to. I’ll share a brief story and discuss how we solve this problem here at TGG.
Finding the Right Customers: Sell to Those Who Want What You’re Offering
When I first started selling TGG’s accounting services, I thought I needed to go out and teach people the value of accurate accounting, and discuss all the benefits that come with managing by the numbers. It’s true that you get increased accountability, cash-flow, profitability and business value. But what I’ve learned is that if I need to educate too much, these are likely the wrong people to sell to. These individuals don’t understand enough to truly appreciate what we’re doing. Instead, finding the right customers means selling to people who were already looking for accurate accounting services.
These individuals want to manage by the numbers but just needed a little help. Look for people who already want what you have to sell.
But how do you find those people? First, make sure that you’re tracking all of your marketing efforts. Categorize them not only by demographic but also by psychographic differences. For example, separate those who want accurate accounting, or want the numbers, vs someone who just had something stolen from them and needed someone in an emergency.
Finding the Right Customers: Keep Track of Retention Rates
Next, start tracking your retention rates. Not just retention rates as a global metric, but how many customers within each demographic and psychographic vertical come back and use your services again. Happy customers are returning customers, which lead to future sales opportunities.
Finding the Right Customers: Keep Track of Gross Margins
Third, you should track on gross margin by customer. What I think you’ll find is that the happiest customers equal the best gross profit. Those folks are the ones who are driving the business forward. So when you think about this, segment by demographic and psychographic, and track them through the funnel. Only sell to the people who really want what you’re selling.