The Pareto Principle, derived from the observations of Italian economist Vilfredo Pareto, states 20 percent of your efforts dictate 80 percent of your results. Applied to business, the Pareto Principle would have 20 percent of your clients generating 80 percent of your sales – and in my 21 years in landscaping, I’ve seen this hold true. But what I haven’t seen is many contractors manage their time accordingly. If 80 percent of your business stems from only 20 percent of your customer base, wouldn’t your business be best served if you devoted 80 percent of your time to them?
Now before you groan at the thought of completing rearranging your priorities, remember, it’s your top clients who are the most likely to buy from you again and again, and it’s far easier to sell jobs to existing customers than to begin from scratch with a new prospect. Why? Because your existing clients trust you. If they didn’t, they would not have chosen your company in the first place. Assuming you fulfilled their expectations and delivered a superb job to them, you have already established a good relationship with them. You have a proven track record, so don’t give them any reason to take a risk with an unproven competitor. Here are two solid marketing tactics:
1. Identify the top 20 percent. List the names and addresses of those who generate 80 percent of your revenues. Then make sure your team knows who they are and where their properties are located. Direct your staff to provide them with special attention. Mark the files of your top customers with the designation “Must Speak With.” This way your administrative staff knows to contact the appropriate salesperson whenever a top client calls. Your top clients must feel important – for they are important to the success of your business.
2. Create a “Regular Call” list. Indicate the actions you plan to undertake with regard to each in the next year. A good rule of thumb is to make contact with these clients, in one form or another, at least once a quarter.
Given the seasonal nature of landscaping, I find it works better to do a compressed version of this schedule and concentrate my efforts on the spring and summer months, with a wrap-up in the fall. As long as you approach it the right way, a client will rarely say, “Hey, I’m hearing from you too often.” If they ask you to stop calling, reconsider your approach. The goal is to single them out as clients deserving superior service. Ask what you can do for them, not what they can buy from you.
By identifying your top clients and then communicating regularly with them, you will gain their respect and admiration.
You should also encourage your top clients to recommend your company to their friends and family. But how do you do this without seeming overbearing? Try this approach: “Mr. Palmer, it’s been a pleasure to do business with you. We are always looking for more great clients like you. If you have a friend, family member or neighbor whom you think could benefit from our services, we’d sure appreciate it if you passed our name on to them.”
You’d be amazed by how much this simple tactic can grow your business. And if they do refer new clients to you, send them something special in return – like a flower arrangement, a gift certificate for dinner from a nice restaurant or even a tree or a discount on the next job they do with you – to show your appreciation. And try to customize your gift. If you know they’re baseball fans, then treat them to a day at the ballpark.
Now before you groan at the thought of completing rearranging your priorities, remember, it’s your top clients who are the most likely to buy from you again and again, and it’s far easier to sell jobs to existing customers than to begin from scratch with a new prospect. Why? Because your existing clients trust you. If they didn’t, they would not have chosen your company in the first place. Assuming you fulfilled their expectations and delivered a superb job to them, you have already established a good relationship with them. You have a proven track record, so don’t give them any reason to take a risk with an unproven competitor. Here are two solid marketing tactics:
1. Identify the top 20 percent. List the names and addresses of those who generate 80 percent of your revenues. Then make sure your team knows who they are and where their properties are located. Direct your staff to provide them with special attention. Mark the files of your top customers with the designation “Must Speak With.” This way your administrative staff knows to contact the appropriate salesperson whenever a top client calls. Your top clients must feel important – for they are important to the success of your business.
2. Create a “Regular Call” list. Indicate the actions you plan to undertake with regard to each in the next year. A good rule of thumb is to make contact with these clients, in one form or another, at least once a quarter.
Given the seasonal nature of landscaping, I find it works better to do a compressed version of this schedule and concentrate my efforts on the spring and summer months, with a wrap-up in the fall. As long as you approach it the right way, a client will rarely say, “Hey, I’m hearing from you too often.” If they ask you to stop calling, reconsider your approach. The goal is to single them out as clients deserving superior service. Ask what you can do for them, not what they can buy from you.
By identifying your top clients and then communicating regularly with them, you will gain their respect and admiration.
You should also encourage your top clients to recommend your company to their friends and family. But how do you do this without seeming overbearing? Try this approach: “Mr. Palmer, it’s been a pleasure to do business with you. We are always looking for more great clients like you. If you have a friend, family member or neighbor whom you think could benefit from our services, we’d sure appreciate it if you passed our name on to them.”
You’d be amazed by how much this simple tactic can grow your business. And if they do refer new clients to you, send them something special in return – like a flower arrangement, a gift certificate for dinner from a nice restaurant or even a tree or a discount on the next job they do with you – to show your appreciation. And try to customize your gift. If you know they’re baseball fans, then treat them to a day at the ballpark.
Explore the May 2006 Issue
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