Are You Working Too Hard for Your Money?
In fact, the younger a business is, or the earlier one is along the business cycle, the greater the difficulties.
These difficulties are responsible for a specific set of problems most business owners encounter. They include lumping all customers into one category, trying to maintain too many products or services, and “promiscuous” marketing. As a result, entrepreneurs have trouble making their business an “ELF” business – easy, lucrative, and fun.
When it comes to customers, business owners often fail to distinguish between the various categories of clients and customers. In their scramble to get their business off the ground, entrepreneurs are tempted to see every dollar of profit they make as equally valuable.
This is not the case.
Not every dollar is worth the effort it took to make it. Neither is every customer worth retaining.
This may be shocking to hear, especially if you come from a background where the customer is always right. In order to better understand this concept, you must consider the time and effort it took to earn the dollar in question.
1. The Hyper-Productive Client or Buyer. These people buy often, anticipate your products eagerly, admire you, and actively promote your business and products to their friends and family.
3. Neutral Customers. Often they buy only once from your business and have a tendency to return and request refunds more frequently.
4. The Damaging Buyer. Bob describes these customers as jerks: they are rude to your staff, have a sense of entitlement for condescending to buy your product, and demand special treatment. They also have a tendency to misuse your products or services and then blame you.
Bob’s advice is to get rid of these customers, which not only poison you and your staff, but take considerable time and effort to make them happy. Bob’s advice is to identify and focus on your clients that spend the most and require the least effort. This will ensure that you are delivering more value to the people who are actually in a place to appreciate your efforts.
In short, freeing yourself up from petty and negatively minded customers will give you the time you need to invest into your true fans and supporters.
Promiscuous Marketing is when an ad or ad campaign reaches a very wide audience, irrespective of said audience’s ability or desire to pay for the advertised product or service. Because the cost of communicating online is so low, many marketers are tempted to reach out to vast numbers of people in an effort to draw people to their brand.
Unfortunately, this brings in many people who do not truly need or want your product or service, which might cause you problems as you struggle to meet their needs, or simply poison relations. To this end, your marketing needs to be targeted towards a specific niche or market that you have identified in the course of your research.
In addition to targeting too many customers, business owners also offer too many products. In a recent study conducted by Smuckers Jelly, two tables with assorted jellies were set out at a supermarket. One table was laden with some 30 flavours while the other sported six. The table with fewer choices outsold the one with many by a factor of four.
Another example: the famous project management website Basecamp used to offer no less than 20 various products. Taking a closer look, co-founder Jason Fried discovered that 75% of his products were making little to no income. He then conducted a radical restructuring of his business which involved cutting down the number of services to six.
You might want to consider implementing something similar in your business. This will reduce the confusion customers feel when faced with too many choices and enable you to dedicate yourself to your top performing products.
Stress and frustration in business is difficult to avoid, particularly if you are just starting out. Every entrepreneur’s dream business is where she can do what she loves on her own terms at her own pace. Fortunately, there are ways to make the process more enjoyable. Keep in mind the following when you venture out:
2. Seek Out the Right People. Make sure to do your research and go after the people who can afford and appreciate what you have to offer. This will save a lot of heartache on both sides.
3. Don’t Confuse your Customers. Identify the core set of products and/or services your clients require and focus on providing the best possible experience with the set.
5. Challenge Stereotypes. Is the customer always right? While that’s up to you to decide, and each particular person and situation is different, it is a good idea to keep an open mind.