One of the best ways to make sure you continue to grow in an existing market, or are able to grow into a new market, is to define what your core customer looks like.
That can mean asking some difficult questions of yourself, your sales team and – sometimes – your existing clientele.
When a person asks for a price, we often feel grateful to be asked to provide our services. Our ego is being stroked and it feels good, plus we need the work! As a result, we take on clients who we intuitively know are less desirable to us in the long run, and are just a potential source of short-term revenue.
Client selection is the single most important way an organization can increase profits, reduce stress and better serve its customers. But, it’s an aspect that many of us overlook.
You should identify potential problem customers as early as possible, and then avoid taking them on and learn to say the word “no.” Just as important, you should focus your efforts on identifying good customers and bringing them on board.
If you think back to all the customers you worked with, you can certainly identify common characteristics of the good ones and the lousy ones.
With some thought and using past experience, you can develop specific client selection criteria. Apply these criteria with screening questions when talking with prospective customers to decide which ones to take on.
The Alphabet model. One method of ranking your clients is to grade them: A, B, C, D.
“A” clients are the best: They can afford the services, they pay on time, they appreciate the work you do for them and they send you excellent referrals. You, in turn, really enjoy working with them.
“B” clients are considered very good, but have some minor flaws in a few areas. Maybe they had a previous contractor they parted ways with, amicably or otherwise. Or perhaps they show a medium level of neediness. These are still good clients and well-worth taking on.
“C” clients are less desirable. They may show some uncooperativeness, have lower budgets or show unreasonable expectations.
“D” clients are the nightmare customers you want to avoid at all costs. They complain about your service, the bill and think they know more than you. They require a disproportionately high amount of attention and need to be avoided from the start or terminated from your portfolio.
Putting it to use. Once you have established the appropriate selection criteria for your company, you should then develop a system for putting these criteria to use. Create some good qualifying questions that link to your rating process with your selection criteria.
Have these questions be as objective as possible such as job location, budget, and how many contractors have been used in the last three years. These will allow you to measure the pros and cons of each potential customer and even your existing clients.
This system should be implemented during the very first point of contact with the client, usually over the telephone. Have your salespeople or even some well-trained office staff complete a series of questions with the prospect as they are talking to him or her. This could include asking the potential client for basic information and details of their needs, while simultaneously ranking the client based on each your selection criteria.
If your sales person or staff determines that the client is not a good fit for your company (i.e. a “C” or a “D” client), then the customer should be appropriately referred to other companies in your area that are willing to accept this type of business.
If the customer is a potential “A” or “B” client, arrangements should be made for an initial personal meeting where you or your salesperson will determine if this is truly a customer worth going after.
The sooner you get customer selection criteria in place, the sooner you will learn how to say no and feel glad you did.
Are they a good fit?
Use these 14 statements as a starting point to figure out whether a prospective – or current – customer fits your own goals and culture as a business. Not all of them apply to every company, but think of this page as a template to determine what’s non-negotiable with any business partners.
1. The client is financially stable and fiscally healthy; they pay on time.
2. The job brings in no less than $1,000 per month, or is on the site of an existing job.
3. The client doesn’t have a “body count” type of mentality; they focus on your results, not your methodology.
4. The client understands what you bring to the table and that price is not the primary decision factor. They recognize the importance of the landscape to their business.
5. The client understands the importance of investing in the project to increase value.
6. The client has stable, productive relationships with other contractors.
7. The client is willing to commit to a multi-year contract.
8. The client does not call random, unnecessary and frequent fire drills. Specifications are reasonable and can be met.
9. The client values partnerships that promote a mutually-beneficial, long-term relationship; they are collaborative and respectful of others.
10. The job is related to additional properties that may require future landscape service.
11. The client and job will serve as a good reference and testimonial; they are likely to refer you to other clients.
12. The job location is within your targeted geographic area. The size of the job may override the distance to the job site.
13. The job fits within your preferred market.
14. The client is currently doing business with another of your departments or divisions, or have had a positive experience with another division.
Answer key: Bottom line, the more times you say yes, the better.
The authors are co-founders of The Harvest Group, a landscape consulting firm.