10 critical questions to ask yourself before seeking new business
It’s easy to become intent on winning new customers but do existing customers bring more value? Find out how focus can maximum profits...
As a part of the business community, you can often get sidetracked with what appears to be important. Steven Covey, author of 7 Principles of Highly Effective People, has a useful chart for how to deem what is critical/important in getting things done.
It’s a good place to start.
Whether you’ve just started in business or have been around for some time, the fact of the matter is you must constantly be focusing on the highest paid aspects of your business.
Whatever it is that derives the maximum payout to your business is where you should be engaged. This will be different for some people.
For some it may be negotiating multimillion pound deals, others may be selling new clients on your highest priced services. One thing’s for sure, the marketing/selling of your core “thing” will and should be at the top of the list.
Getting more people to your place of business
I have to start with the question why.
1. Why do want more people at your place of business?
2. Who exactly do you want at your place of business?
3. Is it because you believe that more cash will come from more business?
4. Is it because you have a high turnover rate due to one-off purchases?
Now each of the questions above are increasingly valid questions and I would suggest that you take the time to consider these before doing anything else.
There are plenty more that you need to access and you should already have these numbers such as:
5. What is the lifetime value of your customer?
6. How long does your customer stay with you?
7. How often do they need your service or product?
8. What is your average transaction size?
9. How much money does it cost you to acquire a new customer?
10. How much on average do spend to keep you current customers?
The last two questions are a case in point because it determines whether you actually need more new customers.
You may even be wondering why you must spend anything to keep your customers if you have already delivered your product or service. Well the truth is that if you treat them well they will support you in style. You will literally be able to create cashflow on demand.
Who exactly do you want in your business?
When we speak with clients, we usually get responses such as: “anyone who needs a massage”, or “people who want to get fit”, or someone who wants to “save money on their self-assessment” etc. There were some slightly varied responses such as: “I sell to two types of people.” A and B both require what I sell, so either will do.
I’m not saying that you can’t have more than one type of customer but you have to start with one identity and it’s usually the one that is the most profitable. It’s not just about who pays you the most money but who requires the least handholding.
This is why it’s critically important to know your numbers.
Another key point to this is source. If you can determine where your best customers come from then you can begin to reverse engineer the process. This alone provides a great starting point.
The thing is, you may actually get one type of customer as a by-product of the other so you may not even need to actively focus on that customer.
Paul Morgan is a senior marketing executive at Automated Marketing Systems, the UK’s leading Facebook for Business agency in the UK.