Who (do you want referred to your business)

Who (do you want referred to your business)

Before you even embark on a referral strategy you need to decide the type of customers you want to do business with. The last thing you want is to get referrals that don’t turn into business, that is, referrals that only buy off you once and never do business with you again or even worse, referrals that create more headaches than they do sales, and never give you the business you’re after.

If you don’t set the rules, your new customers will set them for you. So you must decide who is your ideal customer.

Some customers are more trouble than they’re worth and will actually cost you money. The 80:20 rule, sometimes called the Pareto Principle, states that 20 % of your business comes from 80% of your customers. The other side of this is that 80% of your headaches will generally come from 20% of your customers.

So, before you try to go and get more new customers, decide on the type of people you want as new customers. You also need to grade your existing customers in one of 4 categories ... either A, B, C or D. An example of an A grade customer would be someone who pays their bills on time, are pleasant to deal with, are happy to pay your marked prices, send their friends to you, and spend a reasonable amount with you each year.

Don’t put up with customers who won’t pay their bills, don’t treat you well and constantly hassle you on price. These customers will generally refer similar types of people, and that’s the last thing you want to happen. To get rid of your D grade customers, (those you don’t want to do business with), simply send them a letter that asks them to deal with someone else. You can’t afford to deal with them any more.

Your C’s will meet just 1 or 2 or your criteria and need to be sent a fairly strong letter that informs them of the new rules of doing business with you. Some will come on board with the new rules, others will want to go somewhere else. Either way, now you’ve moved all of your ‘C’ and ‘D’ customers out ...

Your next step is to train your ‘B’ grade customers how to be in the ‘A’ grade with a simple letter. Every client is now aware of the type of customers you want to deal with ...The most important message you need to get through as you send out these letters is that you’re doing it to be able to provide the best service possible for your target market.