How to Find the Right Customers and Boost Your Profitability

The right customers want what you’re selling! Finding the right people to sell to can be challenging, whether you are just starting as a business owner or if you have owned your own business for a while. Selling to the right people is vital to the success of your business, as these are the people who drive business back to your company. So how can you better understand your target market?

When Matt Garrett founded TGG, he had a mission to teach people that living by the numbers and having accurate financial reporting would be the turning point for their business. However, that didn’t resonate as well. TGG pivoted and began selling to people who wanted to live by the numbers and use their financial data to know the true performance of their business.

The lesson is to look for people who want what you have to sell!

Three Steps to Finding the Right Customer

Step 1: Track your marketing efforts. Separate your efforts into demographic and psychographic differences. Psychographic is their preferences. For example, it’s the difference between someone who wants accurate accounting and someone who has experienced fraud in their business and needs help right away. You must understand what your customer’s preferences are in order to sell to them effectively.

Step 2: Begin tracking your retention rates not only on a large scale, who is coming and who is going, but within your demographic and psychographic parameters. Identify which customers are coming back to use your services again.

Step 3: Track your gross margin by customer. You will likely find your happiest customers = the best gross profit. These are your key customers who are driving business for your company.

Once you take these three steps, you will better understand the right customers to sell to, and you will start selling to those who want what you’re selling.

Segmenting Customer Profitability and Gross Margin per Product or Service

It’s very important to segment these two so you can see where your profitability is ultimately coming from and what’s driving it. Often times, your product could be selling extremely well, but has low gross margins and is not adding a lot to your profitability. On the other hand, you could have a product that you don’t sell as much of, but it has very high gross margins and if you expanded it, you could boost your profitability. It’s very important to understand your gross margin by product, so you can focus your efforts on the products that have the biggest impact.

Make sure you understand your gross margin per customer. You may be selling the same product to 10 customers with slightly different prices or terms and that can dramatically affect your overall profitability. Make sure you are focused on high-dollar, high-profit customers so you can drive your business forward and hit your goals.

The 80/20 Rule

Segmenting your customers means looking at where you are getting your sales from. Who are your best customers and who are your not-so-good customers? Chances are the Pareto principle is at work in your business. The Pareto principle means that roughly 80% of consequences come from 20% of causes. In this circumstance, that means 80% of your profits are coming from 20% of your customers. And 80% of your problems are coming from 20% of your customers.

The first thing to do is to segment your customers so you can see your gross margin by customer, your revenue by customer, and how much time is spent on each customer i.e., customer service. Segmenting will help you rank your customers from best to worst. This will allow you to focus on your best customers and re-examine if you want to keep working with your worst ones.


Finding the right customers and continuing to sell to them is what’s going to move your business forward. Make sure you have the data on your customers so you can clearly see which ones may be holding you back. Let us help guide your business to success! Click here to learn more about our services and how we can help you.

This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.

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