Understand Your customers For Business Growth
If I showed you a picture of a big spoiler car with lots of fancy (and expensive) equipment, would you think about it or would you get angry? Can you finish it and want to know more about it and die if you can actually run it? Or do you think this top was garish and needless to say? Both states exist within your customer base…"Not all money is good money."
 |
| Understanding Customers |
I get empowered at this point, not all of your customers want the same experience like the same thing, or want to be treated the same way. Customers, like the cars mentioned above, are very different. If your customers are not all the same, they should have an experience that works for them… or you can sell to the wrong customers. Wait ... what are you saying, isn't all money good money? No, not all customers are right customers. While this may seem contrary to what we were taught in vocational school, it is actually a lot harder than it is today.
If we want customers who like cars that are rich in trick-out features, then we need to leave later and we can find many of them as a business. On the other hand, we 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 products or services they sell .
Let me give you a slightly different example of how everyone ... can relate to eating. Some people like to go to very fancy restaurants, where they take care of you, have awesome food, treat you as if you are a king / queen, and allow you to dine with them for 4 hours. Another group "over the top" Décor, hates the environment, stuffed wait staff, overpriced food, and long meals. You cannot cater to both or you will upset at least one (if not both) of your audience and lose more than just customers.
"You need to make a choice ... and consider everyone a customer."
The examples above may seem a bit simplistic, but I will challenge you to look at your own business and I think you will see many similarities. Most of the time when I challenge a company to look at their customer base, we find such crazy differences in the customers they serve. Outside of being a little surprised, leaders usually notice a wide discrepancy in their customer base. Need to find out if they want to be "REMARK" enabled (tell their customers about them to others) and remain customers.
On further analysis, the second thing that most companies know is that revenue is very different for different types of customers. If the customer type 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 either "serving" or "serving" the type of customer they provide the experience with.
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 it, then they are "over-served" to this audience. When this happens, there are some important changes ...
Restaurants typically lose money on every customer because their overhead is designed to give an "over the top" experience which is a fixed cost ... so lower revenue means less profitability per customer.
The wrong customer will still not be happy, regardless of the price, because they never liked all the posh environments and surroundings before, it's cheaper right now so it fits their budget.
Other customer types (those who love this type of environment) will see different types of customers coming in who may not "fit" in their estimation and therefore their own personal experience may be compromised
Since this wrong type of customer does not love this atmosphere and experience, there is no way they can go out of their way to tell others how terrible your restaurant is… they just want to consider the matter and visit. Do not agree to do because it is still at a low price point
And if they went out of their way to tell others about their restaurant, what kind of potential customer do you think they would tell… in fact, similar types of themselves (people like themselves Know) ... and these are the customers you don't want much, because they just want the cheapest price, not the atmosphere and experience you are designed to provide
While there are many other reasons this is not a good idea, hopefully it gives you some insight into why there are "wrong" customers and "right" customers. Take a look at your own business ... Are you serving some "wrong" customers that you probably shouldn't? Are you receiving a small percentage of revenue from a group that does not fit the "built and designed" experience you deliver? If there are, I would encourage you to finish this situation (for the reasons above).
0 Comments