I was talking to my friend and colleague Lewin Williams yesterday. Lewin is a financial services consultant who helps other financial services consultants improve their business. Lewin’s philosophy—the one that has made a big difference for his clients—is simply this:
Focus on your “A” clients.
Now that sounds simple and obvious, doesn’t it? Focus on the 20% of your clients who bring in 80% of the results. Obvious, right?
Except that it isn’t.
If it were really that obvious, everyone would be doing it, and everyone isn’t. Why isn’t everyone doing it? Two big reasons:
- “I treat all my clients the same, big or small.” Okay, this sounds like a really nice way to do business, doesn’t it? It’s all “Kumbaya” and 1960s and groovy. We’re all equal. Except that, when it comes to business, we’re not. You’ve only got so many hours in the day, and if you treat everyone the same, you’re going to be spending a lot of those hours on clients who aren’t bringing you much in return. Now, I’m not saying you should treat your “C” clients like crap (although that would be handy mnemonic: “C” stands for “crap”!). Every client deserves respect, and every client deserves your best efforts for their particular level of services. What I am saying is that, when you’re allocating your resources (time, money, energy, etc.), your business will improve if you allocate 80% of your resources to the top 20% of your clients. As Lewin says, “If you’re treating all your clients the same, you’re overserving your “C” clients and underserving your “A” clients.”
- “I don’t know who my ‘A’ clients are.” This is actually the bigger issue. In most cases, Lewin tells me, people either never bother to identify their “A” clients, or they identify them incorrectly, using just one or two measures (usually, “How much money are they worth to me?”). To truly identify your “A” clients, Lewin suggests at least four criteria:
- What is their asset size? In other words, what is the total size of the potential income their business could mean to you?
- What is the current revenue? What are they actually bringing in? (Again, this is often the only measure people look at.)
- What is the relationship? Do you enjoy working with them? If you are a consultant, are they actually taking your advice? Are you providing real value to them?
- Are they referring you? If you’re doing your job well, then a true “A” client will help you get other “A” clients. (Actually, that could be another handy mnemonic: “A” stands for “advocate”!) [Tweet “”A true “A” client will help you get other “A” clients. “A” stands for “advocate”!” #BillStainton”]
I’m sure you can think of some other measures to determine your “A” clients. But whatever measures you use, the important thing is that you take the time to identify them. By focusing the majority of your resources on your “A” clients, you’ll see a greater return with less effort. And that sounds good to me!
Now it’s your turn. What measures—what criteria—would you suggest people look at when identifying their “A” clients? What’s worked for you? Please leave a comment in the Comments section below and help others improve their business!