If I showed you a picture of a really modified car with a big spoiler with lots of fancy (and expensive) equipment, would you be excited about it or find it annoying? Would you drool over it and want to know more about it and die if you could actually drive it? Or would you think this was overly flashy and unnecessary to the point of being rejected? Both states exist within your customer base…
“Not all money is good money.”
Let me get right to the point, not ALL of your customers want the SAME experience, like the same things, or want to be treated the same way. Customers, like the cars I described earlier, are very different. If your customers aren’t all the same, they need to have an experience that works for them… or you may be selling to the wrong customers. Wait… what are you saying? Isn’t all money good money? No, not all customers are the right customers. While this may seem contradictory to what we were taught in business school, it is actually more true today than ever.
If we want customers who love the feature packed car, then we need to search and find as many as we can as a company. We too, on the other hand, have to “fire” or “eliminate” customers who have no interest in these types of cars… even if they want to pay us money for some of the products or services we sell.
Let me give you a slightly different example that everyone can relate to… dining out. Some people love to go to very fancy restaurants where they give you impeccable service, have amazing food, treat you like a king or queen and let you spend 4 hours having dinner with them. Another group hates the “over the top” decor, atmosphere, suffocating waiters, expensive food, and long dining times. You can’t cater to both or you’ll annoy at least one (if not both) of your audiences and lose more than just customers.
“You have to make a decision…and go all out to be customer obsessed.”
The examples above may sound rather simple, but I would challenge you to look at your own business and I think you will see many similarities. Most of the time, when I challenge a business to look at their customer base, we find these kinds of crazy differences in the customers they serve. Aside from being a little surprised, leaders often see a huge discrepancy in their customer base. This needs to be addressed if they want to be able to “OBSERVE” (get their customers to tell others about themselves) and be customer obsessed.
Upon further analysis, the other thing most companies discover is that revenue is very different for different types of customers. Even if one type of customer only contributes 5% or 10% to the revenue base, the company continues to serve them. When this is the case, two things happen…they are “over serving” or “under serving” this type of customer based on the experiences they provide.
Let’s go back to the restaurant example. If the restaurant allowed people to come in and enjoy all aspects of their expensive experience, but had to offer it at a significant discount to entice them, they are “overserving” this audience. When this occurs, there are some significant ramifications…
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The restaurant typically loses money on each customer because its overhead is designed to provide an “over the top” experience that is a fixed cost…so lower revenue means lower profitability per customer.
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The wrong customer will still not be happy, regardless of the price, because they never liked all the fancy ambience and surroundings in the first place, now it’s cheaper, so it fits their budget.
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The other types of customers (those who love this type of environment) will see that there are different types of customers coming in who may not “fit” their estimate and therefore their own personal experience may be compromised.
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Since this wrong type of customer doesn’t love this environment and experience there is no way they would go out of their way to tell others how amazing your restaurant is…they don’t believe this to be the case and only visit because it’s at a price lower right now
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And if they went out of their way to tell others about your restaurant, what type of potential customer do you think they will tell you…exactly the same type as them (people know people like them)…and these are the customers the ones you don’t want more of because they just want cheaper prices, not the vibe and experience it’s designed to provide
While there are several other reasons why this isn’t a good idea, hopefully this will give you an idea of why there are “wrong” customers and there are “right” customers. Take a look at your own business… are you serving some “wrong” customers that maybe you shouldn’t? Do you get a small percentage of revenue from a pool that doesn’t fit the experience it’s “built and designed” for? If there are, I encourage you to reconsider this situation (for the reasons above) and possibly remove them from your income base.
Once you fire the “wrong” customers, you now have the opportunity to “focus on the right customers.”
This is one of the biggest advantages to an organization that truly understands who their “right” customer really is…they can get more out of them. When an organization isn’t distracted by serving the wrong group of customers, it can spend more time serving the customers it really wants and is designed and built for. Regarding the restaurant example above, if this restaurant were to follow this thought process, they could weed out low paying, deal seeking customers who don’t care about their atmosphere and focus more on attracting “full price” customers who love their experience.
Don’t change your experience from what makes you the most money…change the customers that keep you from making more money.
What’s important is designing and building an incredibly amazing customer experience for the “right” audience of customers… the ones you want more of. Build this experience to be amazing and designed for your ideal customer. Then do more… add more value to this audience because they will appreciate it, want more, pay for it, and most importantly, go out of their way to tell others about you and the experience. In a relatively short period of time, you’ll have more of the right customers, making you more profitable.
What to do next…
Start by taking inventory of your existing customers, including revenue, products/services, how many there are, and how profitable they are to your business. This will only be revealing. Then look at your customer experience and see what type of customer you are designed to serve best. I can almost guarantee that there will be some misalignment here… this is where you start making changes. If you haven’t already designed an incredibly amazing (and consistent) customer experience for this audience, this is the first place customer-obsessed businesses start.
There is a process for this to happen. If you want to save some time and get to the heart of the matter quickly, let’s have coffee (or lunch or a phone call) and I can speed up the process and provide you with information on what you need to know to make it happen for your company. Coffee (or lunch) is on you…information and education on me. My goal is to help you save TIME in the process if you are interested in being customer obsessed and able to “LOOK” into the process…which is my passion and goal for every business on the planet. Great goal…but start with one.
The only question that remains is: “Are you ready to be obsessed with the client and become able to “OBSERVE”?”
