Carolyn is an overwhelmed small business owner. She’s juggling a dozen clients who each have specific needs, deadlines, and expectations.
Unfortunately, Carolyn hasn’t ever sat down to prioritize her client list.
I know, I know – “My clients are all equally important,” you say.
And in a sense, that’s true. But let’s also look at your client list differently. If you’ve been around me much, you’ve probably heard me talk about Pareto’s Principle – otherwise known as the 80/20 rule. Broadly speaking this rule states that 80% of your revenues come from 20% of your clients. And 80% of your headaches from 20% of your clients (but hopefully from a different 20% than those revenue generators).
When you think in these terms, it becomes easier to prioritize which clients should get your time and attention first.
So, it’s time to pull out those financials you so diligently keep month after month. (You do keep track of your financials, right?)
Run some reports that show revenue by client. If you can, do a three year analysis. Rank those clients #1 – #12 (we’ll use 12 for illustration purposes) strictly by revenue. Those are hard numbers. Next, rank your clients according to “goodwill” (i.e. how ideal a client they are, how much you and your staff like working with them) and perhaps by referral potential (i.e. some clients constantly refer other great clients to you). While these things aren’t directly tied to a client’s revenue number, those added benefits do matter to the bottom line.
Re-order your client using these three criteria. You’ll soon have a very clear picture of who comes out #1 (your highest revenue, highest goodwill, and highest referrers), #2, #3, and so on.
Now, review how you and your staff spend time – is the majority of your client time being spend helping those clients with the #1, 2, and 3 rankings?
No?
Hmmm, it’s time to re-prioritize where you’re putting your energy and time (and that of your staff)!
So many businesses spend day after day reacting to what’s coming at them rather than responding in an organized fashion. Sure, emergencies happen – go ahead and react as needed. But the other 95% of your time should be scheduled and organized to allow you to respond. And your time should definitely be spent responding and serving those high priority clients.
If you’re not currently working this way, how much is it costing you in terms of revenue, aggravation, and potential referrals?