One of the greatest opportunities in business is to evaluate 'What is my average client worth to me'? When I am working with a coaching client and ask that question the usual response is either o 'I have no idea' or o 'I can't tell you that. My customers are spread all over the place. I have a client that typically buys $10, another one that buys $1,000 and one that buys $10,000. So, how can I tell you what an average client looks like'? And that last statement is exactly what we have to look at, 'How can I tell you what an average client looks like'? or possibly even what do my different clients look like. My original question still stands, find the average, and start identifying what the $10 client looks like, what the $1,000 clients looks like, and what the $10,000 looks like. We will learn some things that more often than not explodes my client's business once they start thinking about the difference between the clients. Start segmenting those clients. I like to say 'Dump each client type into a bucket, or a category.' And to do that we have to start defining exactly what those clients look like, and what are the boundaries between the $10 and $1,000 clients. Now what do we do with them once we get them there? Start realizing how important they are to you. Here's what my clients find when they start looking at those options and asking the questions. There are opportunities that we have never explored or found before in the answers. o We might find that some clients are just worth more to us, usually a LOT more, so we might spend more time trying to reach $1,000 or $10,000 clients and less on those that are worth less to us. o And on the other side of that coin we might reduce the price of our products and find that the volumes went up explosively, so that now we are delivering the high cost product at slightly less, but our sales volume went up so drastically that our total income is now up multiple times. Let me give you some examples of a couple of my clients. o Finding the clients that are worth more to us I coached a small construction company. When we looked at their 'average customer value' they were averaging $1,500 per sale. Their target market was $50,000 income homes, and that was what the national franchisor had told them to do. When we looked at their typical sale it was rather obvious that they were doing better in higher incomes. So, we changed from a target of $50,000 incomes to $75,000 incomes, and'wow, a sudden increase in total sales of 10 times in just their next direct mail. Their direct mail response rate went from 0.2% to 0.9%, 4.5 times more customers walking through the door than the previous week's results, their sales closes were higher, AND the average customer is now buying $3,000, 2 times what the client was just last week. Results 4.5 times more people walking through the door buying 2 times as much equals'.. drum roll please'.9-10 times increase in revenue in just one week. Amazing how that works isn't it. o Finding what the clients want, looking outside the box: Now let's look at the other side of that coin with a coaching friend of mine. She had been targeting about $3,000 for her coaching. Sales weren't spectacular, but certainly livable. So, we started talking about the fact that frequently a prospect told her they would just love to hire her, but they just couldn't afford her. I asked her, 'How can you meet the customer's needs'? (Rather interesting concept, huh? Meeting the customer's needs.) She had been trying to hold a price that she thought she needed, and her concept was that she had to ask even more to make more money. First we talked about reducing the price to $1,000 so more could afford it, but this time work in groups. Results 10 people signing up for each group, or $10,000 in income for the same time spent with a single client. $3,000 jumps to $10,000, and an easier sale. A 3 times increase in income for the same time given before. We talked about how to reach even more. She kept putting up barriers that she couldn't give her regular program away, that she wanted to make a minimum hourly fee. So, what I suggested was to give fewer hours to make the overall price cheaper, get in front of more people, and some of those will want to hire you for your full program once they have experienced you and the results. The next step: she dropped her 20-hour program to 7, lowered her price to $250 (less than 1/10th of her original price), and what do you think happened. Ongoing monthly programs with 100 people at $250 each, or $25,000 a month for her group sessions, plus she has ongoing monthly coaching with 15 clients at $500 each. The $250 program feeds the coaching clients, but, now the coaching is such a small portion of her total income. That is more than a 10 times increase in income. What are YOUR next steps? o Define what you average customer's value is. o And IF you have a wide range of clients, break them up into segments and clearly define what they look like, and what each segment is worth to you in total income, or ease of acquiring that client vs. ease of delivery. o Then look outside the box for ways of increasing your overall revenue by working with the RIGHT clients, or by changing your price structure would that increase my volume even higher. o Do any of the prospects you've been talking to need something special that you haven't been delivering (lower price, more service, more something), or have you been hearing an objection that you might be able to resolve. Is that different for each market segment? Just watch your business suddenly leap to a new level. It doesn't matter at all what business you are in. It still works. |
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