If you’ve been in business for a few years and built up a solid bank of clients or customers, but your business relationships are not all as ideal as you’d like them to be, it may be time to take a deep dive into who you’re working with.
This is the first of two articles that will help you understand how to focus on the ideal clients or customers you want for your business and how to target them.
The Boston Matrix is used for a range of different profiling measures and it’s also a great way to define the types of clients or customers you currently have in your business, so that moving forward when you create your avatars – part 2 of these series – you will know exactly who’s right and who’s not.
Using the Boston Matrix to Profile Your Current Customer/Client Relationships
The graphic below illustrates how to segment your current clients/customers based on the relationship they have with you and their profitability to your business:
As you can see it’s split into A, B, C and D customer types with an additional B+ customer who has a high potential to become an A customer.
Starting at the bottom:
D Customers – Bad Relationships / Not Profitable:
You should aim to remove these types of customers if you have them at all, because a lot of time and energy will be spent to no avail. They don’t get along with anyone in your business and the rarely if ever, spend any money with you.
C Customers – Highly Profitable / Difficult Relationship:
Although this type customer is profitable, as with D customers, they can be hard work and not easy to satisfy with their requests or, they have extremely high expectations. You spend a lot of time and energy trying to service them because of their profitability, despite the fact that they are rude to you or your team. With that in mind you should either manage them our or sell them on.
B / B+ Customers – Great Relationship / Low Profitability:
These are your bread and butter customers who you have a very good relationship with, but they don’t spend as often as they could. It may be that they don’t fully understand your services or they potentially have similar relationships with your competitors who they also buy from. These customers are worthwhile investing a little more time in to find out how you can improve what you do for / sell to them to see if you can move them to a B+ or A customer.
From a psychographics point of view you should definitely use their characteristics for your ideal customer avatars.
Your B+ customers are the ones who you can identify from your B customer types that have a high possibility of becoming A customers.
A Customers – Great Relationship / Highly Profitable:
Okay, so now we come to the A customer types. They love you, your team, your business, your brand, and what you stand for. They see you as a valued partner/supplier or service provider because you have a strong relationship with their decision makers/directors, you understand their business at a high level and, you can anticipate and respond to their needs easily.
This is your ideal customer avatar!
Using this strategy to segment your clients or customers, it suddenly becomes quite clear where you may be having challenges in growing your business and more importantly, what attracting your ideal audience.
The last thing you want to do is be wasting time on customers you have a bad relationship with and/or those who don’t want to spend or invest money into your products or services.
It is possible with C clients/customers to try to work through the challenges in the relationship and potentially move them to a B, B+ or A customer. Explain where they are in the matrix and see if they are willing to look at improving how they work with you.
That being said, if they’re just not aligned to your brand values or they don’t like your business it’s unlikely that you will be able to move them up the scale. So, at this point it makes sense to either move them out of the business or refer/sell them to another business within your industry.
Maintaining Your Customer Profiling Matrix
As a rule of thumb, you should review and update your customer matrix every 6 months. However, once you know what your ideal target market looks like and you undertake your due diligence accordingly, your acquisition strategy should support you with obtaining leads from the audience best aligned to your business goals.
Support for Your Business
Growing a successful business and brand is about building and maintaining great relationships and delivering an invaluable experience.
For those of you who have a sales team, it may be challenging getting everyone on the same page and understanding how to manage the interactions they have with your clients or customers. Taking them through this process enables you to all work together to create a more cohesive strategy for your business development, leads and sales goals.
For further support with your customer profiling and target market strategy, book a free brand strategy call with me to find out how I can help you build and maintain your ideal target market.
Look out for Client/Customer Profiling Part 2 - Developing Your Ideal Client/Customer Avatars.