As a business owner you know that it costs anywhere from 5 to 7 times more to get a new client than to keep an existing client.
But beyond the cost, there is also inherent value in knowing more about your existing clients.
And when you know which of your clients are the best, and worst, you can save yourself an enormous amount of time, energy, and stress as well as make you more money.
Your best clients are no trouble, they pay on time and most likely they are loyal and eager to give you referrals.
Your worst clients drain your time, don’t pay on time, are demanding, and probably complain about you.
Don’t be afraid to ‘fire’ bad clients. Once they are gone, a space will remain for fabulous new clients.
So how do you figure out who needs more love and who needs to go?
How to Analyze Your Clients
It may not be fun or sexy but you’re going to need to start by looking at the numbers. Do the math and figure out who your best (biggest and most consistent) clients are.
Next, identify smaller clients who require a lot of your time as well as clients who are difficult to work with. Think about letting them go.
Even if you happen to adore all of your clients and don’t need to part ways with any of them, you can still figure who your best clients are and make an effort to do more for them. I’ve got ideas for you about how to do that in a minute. But first, let’s take a look at a fascinating concept.
You’ve probably heard of Pareto’s Law or the 80/20 Principle which can be applied to a multitude of situations. According to Tim Ferriss, author of The 4-Hour Workweek, “Pareto’s Law can be summarized as follows: 80% of outputs result from 20% of inputs.”
When you apply this concept to your clients, you may find that 80% of your revenue comes from 20% of your clients. And that the majority (80%) of hassles come from a small number (20%) of your clients.
Tim Ferriss was motivated to apply this concept to his business over ten years ago because he wanted to take one year off and travel the world. The result was that he was able to double his monthly income and reduce his weekly work hours down to 15 hours a week from 80 hours a week.
Let’s recap the benefits of analyzing your clients so you can start paying more attention to your star clients and stop working with your dud clients.
Benefits of Client Analysis & Shifting Attention
* You build more loyalty with existing clients so they stay with you longer.
* You can put more effort into creating and selling new products to star clients.
* You save time because you no longer deal with difficult clients.
* You get more, high quality referrals.
Convinced it’s a smart move to analyze your clients? Great, once you’ve identified the fabulous ones, you need to show them the love.
Ways to Give More Love to Your Best Clients
1. Give them additional time with you.
2. Give them extra products.
3. Offer new products and services to them first.
4. Promote them on social media.
5. Give them referrals.
6. Send personal notes in the mail.
7. Share valuable resources with them.
I hope you’re starting to see the value of making the time to evaluate your client base. Once you know who’s who, you can prioritize the amount of time and attention you give to your clients and give more to your best clients. And when you do this, you’ll have more fun in your business and be more profitable.
© Stephanie Ward
WANT TO USE THIS ARTICLE IN YOUR NEWSLETTER, BLOG OR WEBSITE? You can, as long as you include this information with it: Stephanie Ward is the Marketing Coach for Entrepreneurs who want to create meaningful and prosperous businesses. Grab your FREE copy of the special report ’7 Steps to Attract More Clients in Less Time’ plus business building tips, at: https://www.fireflycoaching.com.
What are your thoughts? Do you treat your clients differntly? Share below in the comments section.
