It’s time to put a wrap on our conversation about target accounts. It is important to emphasize here that lacking specific criteria for choosing the right client can be a death sentence for early stage companies.
Not all clients are a good fit for your company. It is your responsibility as a leader to choose wisely and thoughtfully about with whom you do business. Here are some questions you should ask yourself when analyzing your client base:
- Are all of our clients profitable? If you don’t know, find out. For those that are not, put a plan into place to make them profitable. If that cannot be accomplished, or if they are unwilling to become profitable – it’s gut check time…I say walk away.
- Which of our clients are not paying in agreement with our terms? Then do the same analysis as above
- Are any of our clients putting such pressure and demands on us that it is negatively impacting the rest of our base? Then ask – is it worth it?
- Are any of our clients too big or too small for us to effectively service? Some symptoms of this are, 1) unrealistic demands from the larger companies, 2) services requirements that are outside your capabilities (again, usually larger companies, 3) support agents upset about the amount of time it takes to service accounts vs. what they are paying (could be either too small or too big of clients)…etc. Once a reasonable service range is established then do not extend beyond that range
With these answers in hand, you are now able to build a target client description that will allow you to focus. This focus will save you time (in service, marketing and sales), money (in service, marketing and sales) and headaches (from staff and personally). So, let’s now take a look at an example of a well-documented target account.
Target Account for “Well-Run Inc.”
Employee Size – Privately Held (25-250)
Revenue Range – ($3M – $100M)
Contact within Account – CEO
Geography – Greater San Francisco Area
Payment Terms – ACH or Credit Card
Contract Value Range – $10 – $100,000 / year
SIC Codes Serviced – Major group (47,60-67, 70-89)
Unique Conditions -
- Strong Management Team
- B+ Better D&B rating
- 50% of staff uses computers
- Windows Environment (non-Mac)
- Internal IT Department
- Willing to work within Scope
- Consistently Meets Delivery Schedule or adjusts timelines when they do not
- Willing to attend quarterly review meeting
- Will refer you to others
For those of you in the professional service industry, this description probably sounds like a dream…and in some ways you are right. But there are companies that closely match this description. There may not be 1,000’s but there are at least a few hundred given the geography (Greater San Francisco Area) I’m sure.
And wouldn’t your company be more predictable, easier to run and more enjoyable if you were able working with them verses the alternative?
Comments?
Here are some additional resources for you to review:
