Last summer I read an awesome book called 1-Page Marketing Plan. It was really, really good.
I won’t go into all of it. But I do want to provide an oversimplification of a way to assess clients, that I got from one of the chapters.
In a nut shell, in order to make the best choices about which clients you take on and which clients to keep, you need a system to help you look at those clients a little more objectively.
It starts with how they feel and what you need.
How They Feel
How each of your client’s feel usually fits into one of these three categories.
- Hot: These clients absolutely love your company and would pay you more for the same product or service out of care for your company and loyalty to your brand.
- Luke-warm: These clients are indifferent to your company. You provide the product or service at the best price and they’re not going anywhere. But your company isn’t particularly important to them.
- Cold: These are the clients who you’ve already had major disagreements with. Bad vibes are floating. They have had few positive things to say to your company and vice-versa.
What You Need
At the core, what entrepreneurs need in the work they choose are one of the following (both are ideal).
- Fulfillment: When you’re passionate about what you’re doing for a client, you’ll go to the moon and back for them. A huge part of the reason a lot of people go into business is because they want to do what they are passionate about.
- Profit: Money isn’t everything but in business if you don’t make enough of it, you don’t stay in business.
You Should Aim For These
All of this stuff seems obvious but it’s easy to get caught up in the hustle and bustle and forget to take a birds-eye view.
In an ideal world, all of your clients would be hot, fulfill your passions and profitable. But in reality, that perfect mixture isn’t always possible. I like to aim for 2 out of 3 in most cases.
Hot and profitable:
In this case, your client loves you, you love them and you’re making money. Maybe you’re not the most passionate about the work. Maybe it’s boring. But in this case, that’s OK. The relationship is incredible and you’re keeping the lights on.
Fulfilling and profitable:
You absolutely love the work you’re doing and you’re making good money. The client is luke-warm about you though and they could leave your company at any moment. This situation is OK. Stick with it. But don’t get too comfortable. All it takes is a better price or something a little more convenient and they’re gone. If they’re cold, end the relationship in respectable terms as soon as possible. Cold relationships are toxic to your business. I have more thoughts that I share here.
Hot and fulfilling:
The client is awesome, they think you’re awesome, but you’re not making money. As long as you’re not losing money and are at least breaking even, there’s still a place for these relationships. Money’s not everything. But you can’t make a habit of losing money while working for others. So a few clients like this are a good thing. But don’t go overboard.
3 rings to rule them all:
Profitable, fulfilling and hot. Do everything you can to get more clients like that and do everything you can to keep them. A few of these are better than millions of any of the others.
So What Now?
There’s no homework so-to-speak. But as you continue to grow your business, keep an eye on the boxes each of your client’s check. Because if you don’t, it’s all to easy to find yourself in a situation where you hate what you do and wish you could go back to “Go” (can’t remember if that’s good or bad in Monopoly).