Your business's success depends on the customers or clients you choose. Sound farfetched? Here's what I mean.
Suppose Jane, Dan and a bunch of friends get together for a touch-football game. Team captain Jane chooses all the best players for her side. Team captain Dan gets stuck with the leftovers. With all the best players, Jane's team wins hands down.
Now suppose Jane and Dan own competing companies. Jane identifies her best prospects and actively pursues them, winning all the most desirable clients. Dan takes a less direct approach. He puts out a few "feelers" and slowly spreads the word about his company. Then he sits back and waits for the phone to ring.
While Dan wins a few clients over time, they're smaller, less desirable accounts than Jane's. And Jane's company sprints ahead, just like her team did on the football field.
Successful entrepreneurs choose their best prospects; they don't wait for prospects to choose them. Here are three important steps you can follow to put this strategy to work for your new business:
Step 1. Focus on a narrow target. One of the biggest stumbling blocks to entrepreneurial success is a lack of focus. I often meet entrepreneurs who tell me their product or service is so terrific, anyone can use it. They're marketing to businesses, children, adults--anyone they think might listen to their message. Instead of producing maximum sales in all markets, these entrepreneurs get just a trickle of sales in each. Their lack of focus fragments their marketing efforts--not to mention their budgets.
To increase your sales, narrowly focus on your best prospects and use your resources--time and a marketing budget--where they'll get the best results.
Step 2. Identify your prospects. You'll identify prospects differently depending on whether you're marketing to businesses or consumers. If you're a business-to-business marketer, you need to develop a qualified prospect list. Since the accepted contact sequence in business-to-business communications is call, mail, call, this prospect list is the tool you'll work with day in and day out to contact your best prospects.
First, identify your types of prospects by category. What types of businesses are they? Hospitals, restaurants and law practices are a few examples. Select three or four primary categories, which you'll fill out with about a dozen prospects in each.
As you choose businesses to put in each of your categories, consider the qualifying criteria important to you, such as their length of time in business, number of employees, location and any other factors that make business prospects more desirable. Use trade journals, directories, association membership lists and the Internet to compile your list.
Once you've identified about 12 businesses for each of your categories, contact the companies and ask for the name of the most senior person capable of making buying decisions. Start as close to the top as possible. For example, a public relations consultant calling on banking chains would be better off starting with the vice president of marketing, rather than the marketing director or marketing manager. Start at the top of an organization and work your way down, because if you start with lower-level decision-makers, you can't easily go over their heads to the boss without creating bad feelings.
If your business targets consumer prospects, you'll use marketing communications--advertising, PR and direct mail, for example--to generate leads instead of developing a prospect list. Consumer marketers create a customer profile to guide them in buying the right media. This one- or two-sentence description of your best prospects should contain important demographics, such as age, gender and household income.
If you own a computer training company, for example, you might create the following profile: "Professionals aged 25-49 with household incomes of $40,000-plus who live in XYZ ZIP Codes." You could also develop a business-to-business prospect list with two categories: colleges and universities, and major hospitals.
Step 3. Meet with qualified prospects. Unsuccessful meetings cost you plenty in lost time and money. So it's vital to pre-qualify every prospect carefully by phone before you set up a meeting. No matter whether you're selling to businesses or consumers, before you make that qualifying phone call, prepare a list of questions. Then arrange to meet only with the prospects you determine are the best qualified.
A qualified prospect has a need for your product or service, can afford it and is willing to pay for it. That's why it's good news when you discover prospects who are buying from your competitor. It means that person fits the criteria.
The next time you encounter a prospect who says she's perfectly happy with your competitor, think of it as your chance to prove how much she'll benefit by working with you instead. By choosing your own clients or customers in this way, you ensure higher profitability and faster growth for your new business.