Home Articles Chasing every customer is a recipe for disaster

    Chasing every customer is a recipe for disaster


    One of the worst steps you can take in business is attracting and accepting the wrong type of customers. This situation takes me back to one of my previous businesses.

    I was really excited about my new business. I had researched everything I needed to, made my plan and set out full steam ahead. The idea was to attract and take on any work I could get for a limited time on a quest to hit the ground running with almost instant income. In order to attract this type of customer, my pricing had to reflect what this type of customer was after, which was the best price they could find in the local area.

    Attracting the ‘any customer’ was not only a quest to get the ball rolling in my business quickly, but also to build up a great portfolio of work to show off to my potential customers (my real target market), and to show off that I had a long list of customers who like my work.

    Of course, I didn’t plan to attract the ‘any customer’ forever, as that would not be profitable. Once I had plenty of work for my portfolio and a history to reflect on, I would change my target customer and my pricing and packages to match the new target market – and thus become more profitable. I had it all worked out. It was a master plan. Hoohoohahahaaaaa. Excellent.

    My plan might sound like a reasonable one. But now, I can’t believe I planned it that way and there’s no way I’d fall for it again. Here’s why:

    • The products and services offered became more and more aligned with the low-priced ‘any customer’ and, therefore, not in line with my real target market.
    • The output or finished results of my services were not of a high enough quality to be attractive to those higher-priced clients (my real target market). That’s not because my work wasn’t up to scratch, but because my existing customers were not willing to pay anything more than the bare essentials.
    • My pricing had attracted the type of customer who only wants the cheapest, and that type of customer will always shop around and get it elsewhere if it’s cheaper. I’m not saying that higher-priced customers are very loyal (that’s a big enough topic for a separate article). I’m saying that the lower-priced customers are more likely to go elsewhere instead of making a repeat purchase.
    • The type of customer was always expecting me to do more work and produce more samples for no cost. Because these were the only customers I had at the time, I didn’t want to lose them and so I would often give in to doing samples and extra product differentiations at little or no cost.

    With all that extra work and less pay, I had turned my business into an unprofitable work-horse for low-priced, demanding customers. It was all based around a simple plan to attract any work to get things moving, and then change to attract my real target market with a great portfolio of existing work to back me up.

    That change didn’t happen. I was so stuck in the moment that it was too difficult to change things around. There was not enough money to fend off new work from the low priced customers and not enough time to change the offerings, prices and structure in order to attract my real target customers.

    More to the point, to attract higher-priced clients you really need to seek them out one-by-one, unless you have a multi-million dollar advertising budget. Finding clients calls for other, more time-consuming methods – methods I had no time to implement.

    Don’t make the same mistake I made. Define your target market, make sure it’s a good one that will bring you plenty of profits, and stick to it. Do not, under any circumstances, do any work for people outside of your target market – with one exception. If you find a client that’s a step up from your target market, you might want to consider pursuing them. But be aware that taking on this work could place great strain on your business.

    If it’s confidence you lack in getting those higher-priced clients, do something about it. Lacking the confidence is no excuse. Most people have at least a small confidence issue and plenty of people have big confidence issues, but they get over it and plough through, and you can too.

    As for fear of inferior products or services, more research will help you with that. Keep researching from multiple sources until you find the answers you seek.

    Paul Groth is a marketing strategist, entrepreneur and founder of www.marketingmixer.com.au

    Photo: Unhindered By Talent