(18) Aim for the Ideal when Building Sales

I need more sales - find more prospects. This is a consistent statement heard from most small business owners as they work to get their businesses off the ground or maintain their level of success. 

Unfortunately, many small businesses set out to increase sales without a clear business destination in mind. The entrepreneur often drives the business with passion, energy and above all, an almost blind belief in the "uniqueness" of his product or service.

It is important for the business owner to have this drive, but it is also important to formulate a clear strategy. Successful business people take the time to understand the characteristics of the "ideal" client - how many clients and what size clients will create the type of business that the owner wants to build.

Ask yourself these questions:

  • Why am I in business?
  • What makes my business unique?
  • What should my business culture feel like?
You must document the type of business you want to be in order to generate effective sales growth. Simply searching for sales opportunities without going through the larger thought process will give you only short-term revenues.

The characteristics of the "ideal" client for each business will be different, but the definition of this client will require the business to know the user/customer needs for their product or service. This understanding will then allow a calculation of the market potential for the product or service.

This is a necessary step to separate the owner's emotional passion about the value of their product or service from the cold reality of the marketplace demand. Another important benefit of the exercise will be to allow the business to focus its limited resources, particularly people and money, on the most likely path to sales success.

How do you define this "ideal" client? If you are already operating a business and have an existing client base, the first step is to analyze both your current and past clients. Use both objective information as well as your own subjective information to classify the clients as A, B, C or D.

As an example, this could include revenue, profitability, working capital needed to service, and how difficult they are for you, the owner, or your staff to work with, and what they do for your company's credibility and image in the marketplace.

Your operating sales goal should always be to target A and B clients. C clients rarely and D clients hardly ever are pre-tax profit contributors as individual clients. The rationalization is usually "that they contribute to overheads." On the other hand, A and B clients will be the profit drivers for your business.

Without these definitions, you do not have a financial model to grow, let alone survive, in the long term.

Another technique for defining your "ideal" client is to evaluate your competitors' clients and determine with your best judgment those that would be A and B clients. Importantly, you also need to take into account how your product or service is different from the competition so that you are not too narrow in defining your potential clients by the competitive companies' market performances.

This exercise of defining and then focusing your sales efforts and resources on A and B clients may be the most valuable exercise you will ever carry out to building a long-term successful and profitable business.

This profile of the A and B clients will be an integral part of defining the target audience for the marketing, promotions and communications programs that will persuade your key potential clients to be open to your sales programs. And this exercise should be built into your company's management systems for quarterly review.

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