I worked with entrepreneurs yesterday at the I3M Event: Igniting Innovation in Michigan, sponsored by the Detroit radio station and CBS affiliate, WWJ.950. It was an excellent event. And since I have a high regard for stewardship, I try to give back to the local community in which I live. So there you have it.
And the most provocative question I asked, resulting in a jaw-dropping silence, was “Who are your customers?” Because marketing and selling and engineering to anyone and everyone is complete chaos, regardless of whether you are an entrepreneur or not.
However, as I told these talented entrepreneurs, there are so many mature businesses who have succeeded to the $2.5M gross annual revenue mark (and even to the $90M mark) who are undisciplined in terms of their marketing and sales program.
Now, you and your company are not going to turn down a “gift” project that seems to fall from the sky. However, when and if that happens, do you ask yourself what redeeming traits you and your company have that contributed to being awarded that project? Because this new customer didn’t choose you or your company simply because you were the prettiest face. They researched your company, trust me on that one. The Internet provides a great deal of business intelligence that is available to everyone. And Owners are making sure they know with whom they are doing business.
There tends to be a difference between who you and your company does business with and who you and your company are best suited to work with. And your ability to define your target market (the folks you could do your best work for and cultivate) becomes critical to sustaining growth in this economy.
There also tends to be a difference between diversifying your customer base and having an open-door, y’all come policy to business development. The latter typically results in having lots and lots of customers who tie up your engineering and production time with lots and lots of walk-in or scheduled small-scale projects that need to be slotted in between the larger-scale, longer term, more profitable projects. And these smaller projects can make up as much as 50-75% of your revenue stream in a heartbeat.
Does this sound like your company?
Diversifying your customer base is a disciplined approach based on analysis of your customer base and your deliverables. When’s the last time you or your company undertook this type of analysis? When I asked my entrepreneurs, and even business owners of matured companies, again there was silence. And I don’t think I was asking such a difficult question. But it’s the one area that so many businesses “don’t have time for” because they are busy meeting meeting payroll or creating three-year strategic plans.
Yup, it’s the end of Q3 2010. Wow. And how time flies.
It may be a good time to revisit who you are working for and where your marketing and engineering efforts are focused. This exercise just may round out your perspective.
Think about it.