I had a very interesting experience at the start of this week that I thought I would share with you
We sent out a new campaign for a service we’re offering and got a really good response. We got one response quite early on: there was a technical glitch in the campaign and someone brought it to our attention, but they were also doing it because they were interested in what we were doing and becoming a client of ours.
Now this is the interesting bit. From the prospect’s perspective it seemed to be the case, even though they were asked to fill in an application form, they assumed that it’s not an application form.
From our perspective, everyone who comes to work with us applies to be a customer of ours, and the reason is very simple.
This is the crux for this article.
The point that I’d like to get across to you is this:
Every day as business owners we get to choose what work we do.
We sometimes forget that we get to choose and the pressures of business and cash flow and other things means we take on projects that maybe we shouldn’t take on or don’t really want to take on or don’t have much passion for.
This can have disastrous effects or it can sometimes just take up a lot of your time, but it can be much worse than that.
In a previous business of mine we took on a client that very quickly became 70% of our business.
Everything was fine except the whole David and Goliath scenario meant that this client paid when they got around to paying or when it was in their system to pay rather than pay on our terms and to pay when we need the cash for our cashflow.
What happened on several occasions is that we were completely drained of cash whilst this client owes a large sum of money. Then you’ve got the sunk-cost fallacy kicking in, where you think well, they owe us £20 000, we can’t walk away from that, so we keep doing work and the number gets bigger and bigger.
It did get to the point where we pulled the plug on providing services for them and the long and short of that was that we had to close down the business.
It can have very serious side effects, taking on work that you don’t actually feel that this is exactly what you want to do.
Remember, we all run our own businesses, and the biggest investment we make in our businesses is that we give up some of our life. It’s not just that we pay for something. It’s not just the rent on the office or the computer equipment or anything. You know very well as a business owner the idea of working an eight hour day is unrealistic. You’re at least working 10, maybe 12, maybe more.
If you think okay, do I really want to give up 12 hours of my life servicing this contract or working on this project?
It reminds me of the webinar that I was on a couple of weeks ago. Completely unrelated to any of this, the guys were talking about pricing and customers and the guest on the webinar used a very good phrase, where he said, “When you decide to take on a customer, what you have to ask yourself is for the price they’re paying, for what I’m charging them, do I want them in my life?”
That’s the crux of it – On the one hand fine, we can say okay, we’re taking on customers, but we’re not really taking on customers. We are allowing people to be in our life, to be part of our every day, our every week life, and to have an impact on how we spend our time and what we get to do. You have to be selective of which customers you serve, especially when it’s a service based business, because it’s your time.
If you’re selling a commodity online… If you sell a widget, you don’t really care who buys the widget, and that’s fine. But if you’re doing any sort of professional service, you want to be quite particular about who you work with and how you work.
You need to understand and make peace with the fact that not every prospect is necessarily your prospect. Not every customer is the right customer for you.
We talk a lot about defining our avatar and looking for our ideal customer, and then most small businesses just end up taking on anyone, anyone who walks in through the door.
Yes, I know we designed our avatar, but we’ll just take anyone who walks in through the door.
Have a think about that and have a look at your roster of customers and see which of those, whether they are paying you 50 pounds an hour, 100 pounds an hour, 250 pounds an hour, 10 pounds an hour … If they’re paying you X per hour is that sufficient to give them access to your life?
It’s a much more serious question than simply do I want this customer, because it doesn’t end there.
Those are my thoughts. Let me know what yours are.
Author: Pieter K de Villiers
Pieter K de Villiers is slightly obsessed with systems. The systems and process automation he builds for small businesses are transformative, to say the least. Pieter is a Co-Founder of Barefoot Digital and the Amazon best-selling author of “Barefoot Business: 3 key systems to attract more leads, win more sales and delight more customers without your business killing you”.