Does your business make the same amount of profit from each client?

The answer, obviously, is no.

Your customers are not created equal.

Give or take a few percentage points, 80 percent of your sales will come from 20 percent of your customer base.

It is wise, therefore, to categorize your clients into five distinct categories. Use 1-5, or A-E (or some other rating system that you develop), with 1 or A being your best and most profitable clients and 5 or E being the clients with whom you spend a great deal of your time but from whom you make very little profit.

“Twenty percent of the customers account for 80 percent of the turnover; 20 percent of the components account for 80 percent of the cost and so forth.”

- Vilfredo Pareto, Pareto’s Law

After you have categorized all of your customers, I suggest that you “fire” the ones that make up the bottom of the list.

I know that this sounds like a bold thing to do, and maybe even a little bit crazy, but you will find that your business is more profitable in the end.

The easiest way to rid your business of the trouble­some “low-end” clients is to raise your prices.

Again, this sounds like a bold thing to do, but your better cus­tomers know that price isn’t everything. Your business should have the service and value to back up your prices.

A price increase should send your “low-end” cus­tomers to your competitors. Believe it or not, you will benefit from this.

These customers don’t care about the value that you offer and they take up a lot of your time.

These clients are not interested in anything but price.

Let them go!

Let them slow down your competitors and give them the headache of being busy for very little prof­it.

Meanwhile, you will be able to spend your valuable time working with the better customers on your list.

You already know that most of your profits come from your best clients. Therefore, focus on keeping only the better clients. Work to get all of them to the “number one” cate­gory by offering amazing value when they give you their business.

How many clients do you have in each category?

How much do you love your clients and their business?

Even more importantly, how much do you love helping your clients?

How passionate are you about it?

I have met so many business owners over the years who are just not very passionate about what they do or sell.

This makes me wonder, “Why did they go into business in the first place?”

Having passion for your business is an essential part of successful marketing.

In fact, the passionate drive to succeed is a huge factor in the success of any business.

If you love what you are doing, then your success will be so much greater than what you will achieve if you don’t.

Whether or not you are truly excited about what your business has to offer will be very evident to all of your customers and prospects. It will come across in every¬thing that you do, in all of the words that you write, and in how you speak about the products/services that you offer.

If you really believe in your business, then your intensity will be transferred to your employees in the amount of effort that they put forth, and to your cus¬tomers and prospects in a way that will increase their interest in your products/services.

If you are passionate about what your business does, the result will be more sales. It does not matter what motivates your passion, whether it is making money, or loving the “in-charge” feeling that you get with self-employment, or enjoying the freedom of setting your own hours.

If you maintain a love and passion for your business, you will find that many people will want to do business with you, both now and in the future. Passion breeds success, and success breeds more success.

If you don’t love what you are doing—if you are not totally passionate about it—then go find something else!

“Passion is everything.”
-David Copperfield

People will have a hard time believing you if you don’t have passion for what you are doing. Your clients and prospects can sense it in you when you don’t believe in what you are marketing.

You might fool them once, but you won’t fool them twice.

Be passionate about your business. It will catch on fire.

What are you doing to show how much you love what you do and the things that you sell?

The answer, obviously, is no.

Your customers are not created equal. Give or take a few percentage points, 80 percent of your sales will come from 20 percent of your customer base.

It is wise, therefore, to categorize your clients into five distinct categories. Use -5, or AE (or some other rating system that you develop), with 1 or A being your best and most profitable clients and 5 or E being the clients with whom you spend a great deal of your time but from whom you make very little profit.

” Twenty percent of the customers account
for 80 percent of the turnover; 20 percent of the components
account for 80 percent of the cost and so forth.”
Vilfredo Pareto, Pareto’s Law

After you have categorized all of your customers, I suggest that you “fire” the ones that make up the bottom of the list. I know that this sounds like a bold thing to do, and maybe even a little bit crazy, but you will find that your business is more profitable in the end.

The easiest way to rid your business of the troublesome “low-end” clients is to raise your prices. Again, this sounds like a bold thing to do, but your better customers know that price isn’t everything.

Your business should have the service and value to back up your prices. A price increase should send your “low-end” customers to your competitors.

Believe it or not, you will benefit from this. These customers don’t care about the value that you offer and they take up a lot of your time.

These clients are not interested in anything but price. Let them go! Let them slow down your competitors and give them the headache of being busy for very little profit.

Meanwhile, you will be able to spend your valuable time working with the better customers on your list. You already know that most of your profits come from your best clients. Therefore, focus on keeping only the better clients.

Work to get all of them to the “number one” category by offering amazing value when they give you their business.

How many clients do you have in each category?

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