The smallest target is the biggest

Your clients should be your most important target market. Although they are your smallest market in size, they represent the highest potential for profits. Not only should the bulk of your new business come from existing clients, but 60 percent of your marketing budget and effort should be devoted to enhancing the value of those relationships.

It's more efficient to use your resources to win new business from or through existing clients. It is far less costly to sell to an existing client than to a prospect, so the return on your marketing investment is much higher. You can deliver services more easily, and you don't have to dig out every new lead from square one.

Some consultants may argue that such a high degree of client concentration is risky for a practice. But consider the case where three clients account for 40 percent of a firm's gross revenue. Each client has worked steadily with the firm for 10 years, and they are the firm's most profitable accounts.

In good years and bad, these three clients seek help and pay handsomely for the firm's assistance. Most projects they undertake are not competitive, but are awarded directly to the firm. In rare cases when RFPs are issued, the firm still wins far more than it loses.

Many competitors hawk their wares to these three clients, some with minor successes. But not a single competitor has established a strong enough relationship to unseat the incumbent for anything but the smallest projects. Build the right relationships, and existing clients will be your best source of ongoing business.

0 0

Post a comment