5 Signs You Should Change Your Target Customer Now
Changing your target customer isn't the first thing that usually comes to mind when setting your next year's goals. Rightfully so, after all there is revenue to grow, efficiencies to improve, and many more endless and lucrative ideas to spent time on. The reality is if you're attracting the wrong target customer, you won't reach any, or at least most of your objectives.
What exactly does changing your target customer mean? Perhaps it's changing to a lower income client or the opposite, much higher. It could mean going from targeting couples with small children to no children. Read more about targeting here. Whatever the end result is, here are the top five signs that you should sit down and re-target a new type of customer now.
1. You're not happy with the projects you are spending your time on.
This one tops the list. Yes, money is important and in a different type of list, it's number one. To be fair, this reason leads to more - or less - money. You have to love what you do. There is no substitution to truly loving your work, the quality of your work. You don't always have to love it, but on most days, you should find yourself feeling great about the projects you're involved with. There has to be a level of excitement and sense of accomplishment. This is especially true if you are a business owner! If you're not feeling this, ever, then it's time to work on different kind of projects. What are they and what kind of person commits to those projects?
2. You are rejecting too much work.
Calls, lots of them, is a great problem to have. However after a period of endless "nos" to clients, it's time to refocus. Are you saying no too often because of location - perhaps the areas are too far? Maybe it's not because the margins on the job would be too low. The reason you're saying no, at least majority of the time, is important here. Take time to understand why (if you have trouble accessing info about these past conversations, then read this related article, Benefits of Keeping Track of Your Contacts). Stop wasting your or your receptionist's time on the phone just to say no, change your target customer!
3. Your margins are lower than your competitors'.
Here is a no-brainer. Maybe you're not saying no often enough (see above reason)! Perhaps you're accepting too much work that requires significant labor, travel, or time that you're landscaping or home contracting business is losing money on. We've even seen this to be true for referral work - that's the hardest to say no to, especially if the referrer is a repeat client. While some work you'll have to accept, you average margins should be healthy enough to see an upwards trend year after year. If not, it's time to assess who you are attracting.
4. You're losing a lot of bids.
Nothing worse then spending tens of hours on the phone, then researching, then traveling, and constantly losing bids. Sure, the reasons could be in quality of proposal material, your sales efforts, or a number of other reasons. Don't jump to those conclusions; make a point to look at the possibility that who you're proposing to is simply the wrong person for the type of project work you're offering to. This is especially true if you often find yourself dropping your price too low in negotiations. If your target client can't afford you or wants your service, it's not your target client!
5. Your cash flow in the winter is too low.
For outdoor living professionals, this is a tough one as most would want healthier cash flows in the winter (for those regions in which winter brings a limited amount of work). There are plenty of these professionals who sustain those healthy flows by doing well in net profits during the in-season. If you're struggling winter after winter, it's time to strategize! Read more about improving cash flow in this related post: Stabilize Your Cash Flow by Filling Up Your Sales Funnel.