After 10 years of operating a painting business in the Okanagan Valley I had a nice client base of about 300 customers, which I had worked very hard to acquire and service.
It felt good to have so many happy customers...it gave me a sense of security. The problem is that I couldn't service so many customers well. Sometimes my best, most loyal customers had to wait 6 or more months for me to fit their project in. I wasn't delivering top level service to my best customers and I was often over-booked and stressed.
So when I opened another painting business here on Vancouver Island in 2015, I decided that I would try to get to 100 customers as soon as possible. This, I thought, would give my business a solid base, while giving me a more manageable number of customers, hopefully leading to less stress and better service.
We may think we need a lot of customers to have a successful business. So it was interesting when last week I looked at a report of my sales by customer for 2016 thus far. You know what?...
76% of my sales came directly from my top 3 customers. If you include spin-off sales and referrals, that number would be well north of 80%. That may not be the same ratio for every business, but it is probably close for a lot of them. I've been fortunate last year to have some clients that send me lots of jobs.
It is easy to lured by chasing a lot of customers. But that can be like trying to fill a bucket with a hole in the bottom. If we don't take care of our customers they will drop out of our bucket of happy customers and we will have to continuously fill it with new customers. It is usually easier and more profitable keep our good customers and service them better, selling them more, rather than spending resources to acquire new ones.
It is good though to always be looking to pick up a few more great customers. You will naturally lose some customers every year. You also may not have found your best customers yet, and you could use their business to replace C or D level customers, making your work life much better.
For a micro contractor, quality is better than quantity when it comes to number of customers.
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