PKF Texas: The Entrepreneur’s Playbook® - Type A Customers

Upgrading Your Customers

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Greg Price
Episode: 243
January 30, 2010

Summary:

Have your cost-cutting efforts reached their limits? Maybe it’s time to shift your efforts toward improving the quality of your customer base. Greg Price explains.

Full Interview text

Greg: This is Greg Price with PKF Texas' Entrepreneur's Playbook. Recently the business conversation has shifted. While process improvement is imperative and waste reductions should be a routine part of your business activity, you can only cut costs so much. The top line of your business eventually must carry the next wave of improvement.

New business will be harder to come by over the next few years. Now is the time to decide what type of customers you want going forward. Not all business is good business. Think about your best customers. This is an opportunity for you and your management team to develop a list of critical factors characterizing a good customer for your organization.

Client selection criteria is important, and will guide your sales team to ask the right questions to make sure future prospects are "good customers." With that information, you can contact referral sources to help identify and approach prospective "good customers."

Identify from your existing client base your "A", "B", "C" and "D" customers. What can you do to move the "B" and "C" customers to "A" customers? Do you have too many "D" companies in your client mix? Can you move your unprofitable "D" customers to your competitors? Have this discussion at your annual workshop. Your sales and business development teams should be familiar with what makes a good, profitable customer.

As we start to find our way out of the recession abyss, think about ways to build your business with the right kind of customers. Hopefully, you will begin to "guard the front door" and build a solid business based on an "A" client portfolio.

To read and comment on the PKF Texas' Entrepreneur's Playbook, visit my blog, fromgregshead.com. PKF Texas the fit, that's right!