Choosing your ideal clients, is easily one of the hardest decisions that you'll ever have to make as an 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.
At our design consultancy, Rayvn - we have different customer segments that we serve. Two of my business partners, choose to focus on clients that are only in the hospitality and retail industry. Me, on the other hand, through my personal brand (creative-director.ca) choose to work one-on-one with small business entrepreneurs who are subject-matter experts, and looking to start their own professional service firm / consultancy, and need branding and design advice.
When I work one-on-one with these startup entrepreneurs - 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:
Let's take a look at the retail shopping experience way back in the 1950s. See back in the 50s everyone shopped at department stores, you would drive into town and you'd go to one store to get everything you needed. dress shirts, jewelry, kitchen appliances, televisions, you name it. Not only that department stores featured all kinds of experiences to keep you coming back. There were restaurants there were games for the kids that were special events. So when you went to the department store, you made a day of it.
And then came the invention of the mall. Whereas department stores were mostly concentrated downtown malls were being built in the suburbs, closer to where people lived. And in the malls, you not only had those big box department stores that carried everything. You also had small boutique shops that specialize in selling specific types of merchandise. And this was the beginning of the long and slow death of the department store. Because when consumers were in the market to buy something specific, they would rather go to the store that specializes in selling that item instead of taking their chances at some big box retailer that has everything, but may not have exactly what you're looking for.
For example, let's say you're into leather jackets, wouldn't you rather go to a store that exclusively sells leather jackets, and has every type of leather jacket that you can think of than a store that may have a few of them beside the sock aisle? Well, it turns out that your clients are no different that when buyers are shopping for professional services, they're looking for the professional or the firm or the consultant that's best suited to meet their needs. They're looking for the one and only professional that specializes in solving their specific problem. Now you might be that person. But if you position yourself like a one stop shop department store that does it all .. then how will your ideal client ever know that you're the specialist they need?
Now there's still room in the market for the department store or the professional services firm that does it all. And 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.
The key takeaway here is that if you want to demand premium prices, if you want clients to see you as the one and only solution to their problem, you have to position yourself as a specialist who can solve their needs. Because if you try to be a generalist, if you try to be a one stop shop that does everything - nobody will ever know that you're the firm they should work with.
Hi, I'm Denny Kurien.
I'm a Branding & design consultant for subject matter experts, and professional service firms. I can help you discover what makes your brand extraordinary, and attract clients you love.
Visit my website to book a free consultation:
If you want to take a glimpse of HOW we work with our clients, download my FREE e-book, "How To Brand And Sell Your Expertise Online"