How to Describe Your Business Plan’s Ideal Customer - dummies

How to Describe Your Business Plan’s Ideal Customer

By Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck

Every customer is important to your business plan, but the truth is that some are more important than others, and a precious few are most important of all. Knowing the difference if key.

The difference between good and great customers is huge. If you’re already in business, you know that some customers are more profitable, more pleasant, more apt to buy frequently, and most likely to spread good words about your business. Those customers are the ones you want to focus on and increase in number.

Make sure you know which customers are most valuable to your business so you can then focus your attention on strengthening relationships with them — and reaching more just like them.

Your best customers

  • Ask you to do things you do well.

  • Appreciate what you do and willingly pay the price that you ask.

  • Make reasonable requests that lead to improvement and expansion of your skills and services.

  • Inspire your business to move in new and profitable directions.

Great customers inspire and deserve utmost attention. Heap on the special services, pile on the appreciation, and do what you can to keep them loyal to your business. You’ll be doubly rewarded with repeat purchases and invaluable word of mouth.

Good customers appreciate your offerings, buy your products, and pay your bills on time and with courtesy. But they can be transitory — here today, and gone tomorrow. And what often lures them away is a better offer. They may never become loyal patrons because they value special deals more than they value long-term business relationships.

Your most troublesome customers are likely simply mismatched to your offerings. They’re excessively negative, unreasonably demanding, and maybe even abusive to your staff and your business systems. Watch for these indicators to flag customers you’re better off not having in your clientele:

  • They consume considerable time and attention yet buy very little.

  • They demand unreasonable concessions on pricing, service, or product alterations, and, if you consented, these concessions would harm your business.

  • They demoralize your staff.

  • They refuse to pay your fair price for your offering or refuse to comply with your billing and service standards.

  • They act dissatisfied no matter what you do for them.

Great, good, and troublesome customers affect your business in very different but predictable ways, following the 80/20 rule, which is also called the Pareto Principle or the law of maldistribution. In most businesses, roughly 20 percent of customers account for 80 percent of the customer service efforts.

But keep in mind that the same 80/20 rule applies to your profits as well: 20 percent of customers will account for 80 percent of your profits. By identifying which customers fit into which group, you can spend more time with your best customers to greatly increase your profits.