Updated: Jul 6
We do branding & design for experts & b2b consultants. And whenever I work with them, the hardest task is to get them to choosing their ideal clients - because they think everyone is their client, and so they try be all things to all people. And that's a huge mistake. Choosing your ideal client is the hardest decisions that you'll ever have to make as a consulting entrepreneur. But also probably the most important decision. It's the most important decision because almost everything about your business is driven by the clients that you serve.
Because who your customers are, determines what your value proposition is, what services you provide, how much you can charge, and so on, and so forth. Which is also what makes this really a very difficult decision. Because choosing to focus on one customer segment or a group of segments usually means that you're NOT going to focus on others.
You Can't Love All Clients Equally
Not everyone is your customer; we know it sounds brutal but it is just the utter truth! Not all firms need to attract the entirety of the market to be successful. The sooner you realize this, the better!
You need to put your best foot forward in deciding who your customers truly are and what markets cater to them.
When we work one-on-one with these consulting experts - asking them to pick one ideal client to work with (ie. a particular niche to serve) is a really tough pill for them to swallow. The idea of narrowing your focus to a specific segment of clients is really difficult for people to grasp, because it's kinda counter intuitive. You would think the more clients that you're willing to work with, the more clients you'll have. Or put the other way around. If you decide not to work with certain clients, you'll have less clients to choose from. Now the question that people usually ask me when we get into this is, why would I want to turn away business? And that's a fair question, why would you turn away business? Let's take a look.
To start with, I want you to think about the clients that you already work with. And I want you to ask yourself, are they all the same? Chances are, they're probably not all the same. There's probably a handful of clients that you REALLY enjoy working with most - they're easier to get along with, they don't hammer you on fees. And they really value the work that you do. These client relationships usually end up producing your best work, and some excellent referrals in the process.
On the flip side, there are probably some clients that are not so great to work with (I call them "Clients from Hell - but that's just between you and me).
Come on now - you know the kind of clients I'm referring to - maybe they're a little bit pushy, maybe they don't really appreciate you or your work. Or maybe they're very, very price sensitive. Now, sometimes these kinds of clients are often necessary to pay the bills, but otherwise a complete nightmare. And then there's probably a good number of clients who fall somewhere in between. They're not perfect. They're not ideal. But they're also not terrible. They're not a complete nightmare. They have their pros and their cons.
Now ask yourself this question, what if you could fire the bad clients and work with more of the good ones? What if you could spend all of your time working with ideal clients, the ones who appreciate you the most, pay the highest fees and help produce your best work. Not only should that sound appealing to you, but it also makes a ton of business sense. Let's look at an example of two different types of markets - vertical markets, and horizontal markets.
WHOLE FOODS - Vertical Market
Vertical markets aim at a targeted consumer base. A company like Whole Foods that only caters to its consumers’ needs for organic supplies will be considered as a business vertical.. They charge a premium for their products they sell, because there isn't enough supply to meet demand.
WALMART - Horizontal Market
A big box store like Walmart is an example of a horizontal market because it accommodates itself in a diverse range of business activities. Horizontal markets will try to maximize their outreach to each and every type of audience, and that's why their products are cheap & affordable.
So as a consultant - which market do you want to play in? Do you want to be premium? Or do you want to be cheap & affordable?
Now don't get me wrong - there's still room in the market for the department store or the professional services firm that does it all, and still make a killing. But guess who they are? They're the BIG firms. They're the ones with massive marketing budgets, huge downtown offices and legions of cheap consultants to do their work for them. Those big firms can afford to be a one stop shop. In fact, it's their business model. They get their foot in the door by offering one service and then they upsell the client on three or four more services because they do them all. But if you try to replicate that business model without the scale, and without the size and without the resources of a big firm, then you're going to go out of business really fast.
In fact, here's exactly what happens when small firms try to act like big firms who do at all. You know what department stores are known for ... massive blowout sales!!! Every weekend, it's one sale or another to keep customers coming in the door, week in and week out, day in and day out, department stores need to offer steep discounts. And that's exactly what happens in a professional services environment. If you try to do it all and serve everyone, you'll attract the kind of clients who are looking to hire a generalist at a bargain, because specialists demand premium prices, and everyone knows it.
So the choice in front of you is pretty clear. If you want to be a one stop shop, that means you're going to cater to clients who want a generalist, not a specialist and therefore are particular about fees, because he wouldn't pay a jack of all trades the same rate to perform a service that you'd pay a specialist in that service. It just wouldn't make sense. Or you can choose to work with a specific group of clients and offer a specific set of services. You can choose to become the go to firm in a smaller slice of the market. And then you can charge whatever you want.