Sales is a critical part of any business. Even a business that isn’t looking for rapid growth needs a steady flow of potential new clients to keep up with rising costs, replace clients that aren’t succeeding and help keep staff engaged and up-to-date.
We think it pays to be very selective about the clients we take on – not only for us, but for our current clients. It’s hard to walk away from new revenue streams but here’s why we at STF Consulting believe in careful planning and being particular with who we decide to partner with:
- Clients represent risk. The managed services business model we use at STF is all about long-term relationships. We assume complete responsibility for the health and uptime of the client’s network in exchange for a flat monthly fee. That means we invest a lot of time up front ensuring the network is stable, then continually monitor and manage it over time – including investing in software, processes and training to stay up-to-date.Many service businesses follow the same path.Lawyers tend to be careful about client selection, for example, as well as financial services businesses like this one. Onboarding costs a lot and it takes time to recoup those costs. Smart investing up-front means ensuring that there is a great fit and the likelihood of a long-term relationship.
- Resources are finite. Your staff has a specific set of skills and a finite amount of time. Those are precious resources that must be spent in a way that makes the most sense for the business.When you bring in a new company that is too dissimilar from your other clients, they can end up costing you more due to an investment in new technologies or skills that are not needed to support your other clients. They will become the 20% that take up 80% of your time. That can be detrimental for your other clients – the bedrock on which you’re building your business.
- Productive relationships fuel your business. Difficult clients can be accumulated when you are just starting your business and reluctant to turn away revenue. But even the nicest clients can cause agitation if they do not fit well with what your company has to offer. These differences can frustrate your staff and distract from long-term relationship building. A cohesive client base, on the other hand, is more pleasant to manage and interesting for your staff to serve. Engaged staff and satisfied clients stick around.
It’s not easy to be picky about the clients you take on. You may take flak from your salespeople, your accountant, and others. Every business owner faces such resistance but even start-up businesses are better off being picky according to a New York Times article. Developing a very clear profile of a good-fit client coupled with asking a lot of questions up front to qualify contenders helps to create a healthy and rewarding workplace.