Your clients are huge investments; treat them as such. You’ve invested a lot of money in purchasing your client base. You’ve produced marketing materials and sales activities. You know it is not easy nor cheap to find leads and convert them to sales. You’ve spent a lot of money on your own education and professional development to provide a service to your clients. You’ve spent a lot of money on computer equipment, software, furniture, rent, etc. to serve you’re clients. Now you want to keep your clients, or do you?
Just like any other investment, you want to achieve a return on your investment. If the investment ceases to provide a return, sell it. If the return increases, buy more. And if it’s stable, hold. Your clients are no different. If a client ceases to produce a return on the investment you’ve put into it, let it go. Spend your time and money on the clients that are giving you the best ROI. If you’re too skittish to let go of a client, raise the price.
Why not? Why can’t you charge one client more for your service than another? It happens all the time in other busineses. Some customers are charged more simply because they failed to negotiate a lower price. Some are charged more because they purchase very little volume. Professional services firms must get away from the billable hour trap because it creates price based on cost. As Ed Kless puts it, Price is not based on cost. Price should be base on value.
I’m confident your client base follows the 80/20 rule where 20% of you clients produce 80% of the revenue. It’s probably more like 90/10, but that’s still meets the 80/20 rule. Focus on your top 20% and develop new offerings from their needs. Focus on the middle 75% and try to move them to the top 20%. Get rid of the bottom 10%. They’re probably not in your niche; whether too small, too big, or just not a good fit. Partner with another firm with a different niche and share leads. After you finally let them go you’ll wonder why you didn’t do it sooner.
Whatever you do, do NOT treat your bottom 10% any differently than your top 10. Do NOT provide them any less customer service and care. Your reputation and brand are at stake. Your customers have a voice and will use it.
