Secrets to Success John-Paul Micek

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Identify the clients
who deserve your
special attention

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All clients are not equal, and if you treat them that way you do so at your own peril. Your good clients know who they are, and they expect some special attention or they will leave. You can count on it. If you're in a service business (and who isn't,) ignoring this important fact can cripple your business growth and maybe even cause you to close your doors for good.

So how can you prevent this from happening? How can you quickly and easily differentiate between your "top," "good" and "average" clients, while accurately identifying the "dead weight" clients that need to be cut loose? There is a simple process you can take action on today, and then repeat once per year.

Stratifying your clients is a long-term strategy that will ensure that you never have to do a mass firing of multiple clients. It's based on the Pareto principle (sometimes called the 80/20 rule.)

In most every company (give or take a few percentage points,) you'll find that 80 percent of profits come from 20 percent of the clients. Conversely, 80 percent of your headaches also come from 20 percent of your clients. These two groups are at opposite ends of the spectrum, with the "dead weight" crowd subversively working against you and your top clients.

Here's a simple example of how the client roster is stratified within most service companies:

Gold -- top 20 percent (the clients who give you 80 percent of your profits)

Silver -- middle 60 percent (the clients who give you the bulk of your cash flow)

Bronze -- bottom 20 percent (in the best case scenario, these clients just "exist," but if you have not cleaned your list yet, this is also where you'll find your "dead weight.")

Starting as soon as today, and then repeating this process once per year, you're going to sit down and review your client database using a systemized analysis. This is likely to be the most powerful addition you can make to your annual planning. When we use our client analysis matrix in coaching business owners around the world, it ends up being a tremendous performance and profit releasing process every time.

I can't go into the full details -- due to the interrelationship and weighting of the different questions included in the matrix -- in this short space. But I can give you seven key questions to start your analysis with. Sit down and review your client list one by one. Be sure to have your receivables history and service tracking records handy while you answer the following questions.

1. Is the client profitable?
2. Do they pay on time?
3. Does the client purchase frequently?
4. Do they refer new prospects and clients to you?
5. Does this client offer any strategic advantage in the market or in your niche?
6. Do they regularly invest in your up-sell offers?
7. Am I (or my employees/ company/systems) contributing in any way to any negative answers to the above questions?

All clients may not be equal in value, but they should never know that. It is your responsibility as a professional to make sure that each and every person in your client family feels that they are important. But it's also your responsibility (to yourself and your top clients) to clear the "dead weight." Completing this process at least once per year and modifying your service procedures to reflect your findings will help you to quickly clear the dead weight, focus your special attention and create raving fans at every level.

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John-Paul Micek is a small-business strategist
and chief operating officer at RPM Success Group.
Reach him at JPM@RPMsuccess.com
or toll-free at (888) 334-8151.

Deborah Cole Micek, chief executive officer
of RPM Success Group, is a business success coach
and life strategist. Reach her at DCM@RPMsuccess.com
or (888) 334-8151.