Finding The Right Customers For Your Business

The quality of our customers not only determines the success of our companies but is also one of the main reasons why new businesses fail.

Basically, customers mean everything to a company. Whether you are an owner or an employee, the benefits generated through customers pay for your food, transportation, family expenses, electricity, the internet, home, trips, hobbies, and more. The funds generated through the customers support the operation of the company (including, for example, wages) and also reward the investment of shareholders.

The main factors in which small businesses fail in their relationship with clients are:

1. Determine an appropriate niche, large enough to grow in the long term
2. Create products and services that generate value for customers
3. Acquire high-value customers.

1. Determine an appropriate niche, large enough to grow in the long-term

Niche specialization may be a proper strategy to differentiate and compete against larger rivals, as it might in some cases reduce competition. Anyway, keep in mind that the more specific the niche, the smaller the size and the cost to reach customers may increase.

Companies must find a specific niche in which they are distinct, and it should be large enough to support the operation. Determine the projected growth of this niche, the market share necessary for the company to be sustainable and the required costs to reach customers.

2. Create products and services that generate value for customers

Companies should consider not only how to create value and satisfy customers, but how to connect this approach to sustainability and business growth through higher margins.

Related post: How to attract customers

There are several methods by which products and services a company can generate value for customers as offering unique benefits and features, good and faster distribution channels, a broader product line, or more options for customization and low prices.

To achieve customer satisfaction you must understand the product or service as a whole experience that begins long before the customer arrives at the company and that does not end when the customer pays. That's why companies should be more open to creating key alliances that allow them to offer more complete and effective services, and to differentiate themselves from competitors.

Finally, the company should be able to offer products and services with high margins that allow the sustainability and growth of the business. The efficiency of production costs is not a differentiating factor and will always be matched by competitors. The company must then focus on generating more value in its products and increase its chances of generating income. For example, through more efficient distribution channels, the integration of auxiliary products and services to generate more revenue, or by reducing the need for sales support and e-commerce, among others.

3. Acquire high-value customers

Although the customers are the most important for the company, not all of them are essential and will create value. The company should focus on profitable customers, which does not always mean looking for wealthy clients. Profitable customers are those that allow the company to establish a lucrative price and generate the benefits needed to meet its financial goals. These customers, whether distributors, wholesalers, retailers, or the end user, are easy to access without incurring huge marketing costs to reach them, or involving large costs for the company to meet them or convince them to try the product.