As a business owner, you might have an idea of the number and types of clients you need to aim for.
You might even have pinned your goals down to specific industries or organisation sizes. But if your approach is still to sign up ‘anyone who will pay’, it might be time to review your marketing strategy.
Getting picky about who you do and don’t want on your client base will benefit your business all round.
Seth Godin coined the concept of a ‘minimum viable audience’: the smallest number of people you need to convert to make your business work.
Before you think this sounds like ambition-limiting jargon, let’s look at an example; Say you want to turnover £500k this year. You have two main types of clients at present:
Client A, typically an avid cost-saver with around 10-20 employees, whose need for reassurance and detail can be a drag on your team’s time, and client B, a relatively non-price sensitive employer of 50-100, keen to ‘get the job done properly’ without having to get too involved.
Based purely on the past year of business, you’re anticipating around 85% client As and 15% client Bs. But have you gone any deeper and looked at what each type of client is worth?
Let’s say client A typically brings in £5K over a year, while client B brings in an average £50k.
To hit your £500k target with clients As alone, you’d need 50; you’d need just 10 client Bs. To put it another way, 10 client As are worth the same as 1 client B.
In addition, while they might be easier to reach and convert, servicing a high volume of client As is a drain on your time. So why not adjust your targets and make a conscious effort to attract more client Bs?
Instead of 30 client As bringing in £300k and 4 client Bs bringing in £200k, you could half the volume of clients you need to convert and service simply by shifting the split. In this scenario you could target:
10 client As to generating £100k of income and 8 client Bs to generate the other £400k.
While this is an oversimplistic example, it illustrates the importance of specificity when it comes to targets, both in terms of differentials: what size, industry, need can we best service? And value: which clients are going to be more profitable and less resource-intensive to service?
Also, by being more specific it’s easier focus your resources on the actions that will enable you to achieve your ambitions and streamline your offer and communications to appeal to that particular client type.
It doesn’t mean you can never work with clients who don’t fit your ‘minimum viable audience’ definition – although articulating what that is will certainly be helpful when deciding which prospective clients to take on.
Essentially, quality is always better than quantity, and moving away from ‘anyone who’ to ‘someone who’ is a good way to get your business to where you want it to be.