I was hired recently to come by a local small business. Marketing ideas, it’s what the owner wants. He’s determined that he needs me to come up with some clever internet marketing ideas.
Talking to him I found out that he’s got two types of clients: private people and companies. The private people spend $100-250/month on his products. The companies spend thousands, some a bit over $10,000.
The more a client makes, the higher my client’s revenues and profits. So, naturally, when I found out that he’s got at least one client that spends over $100,000 a year on his products I wanted to know more. Where he got this particular customers, what kind of customer this was, etc. And suggested we go get him more of the same.
I thought I was being very logical. Because, you see, there would not be that much increase in his expenses. Because, you see, he’d hired me because his growth had leveled off and he wanted increase.
Well, my logic and my client’s logic are not the same. Maybe because I’m a small business marketing consultant.
This is how he see it: I he loses one of his private clients, he loses an insignificant percentage of his revenues. He doesn’t feel the loss, can easily compensate. If he loses the $100,000+ a year client, he loses a big chunk of his revenues, a noticeable percentage of his profits. He doesn’t want me to help him land more of the $100,000+ a year clients.
His logic holds true half the way. If you have 100 clients that each gives you $100, you have $10,000. If you lose one of them you’ve lost only 1%. If you have 98 clients who give you $100 and 2 clients who give you $10,000, now you have $29,800. If you lose $100, no big deal. Heck, you can lose all the ones who give you $100 and you’re still left with mortgage and car payment and a nice vacation.
Here’s where, in the 5 or 6 years he’s had the big spenders, he’s failed. He’s already gotten big spenders and they can go away. Worse, they can do it at the same time.
Additionally, if you have the same number of clients (100) but each gives you $10,000, now you’re getting 1,000,000. If you lose one, you’ve lost the same 1% that you lose if you have 100 clients that each gives you $100.
It’s true that $10,000 is more significant than $100. However, $990,000 is far more than the $990 you’d be left if you only had $100 clients.
Would he have to change his marketing? Yes. Would that cost more? Yes. Would he have to change anything else in his business? Probably not. The two business clients he has have been with him for several years. Would he be spending more, then for anything not marketing related? Probably not. But even if he did have to get a more expensive office, better (costlier) assistants, more expensive office furniture, even including his higher marketing costs, his profits would be significantly higher, so much higher that it doesn’t make any sense not to go for it.
To me it’s a given, you always go for the $10,000 clients unless you don’t like the type of person or business you’d have to become to be successful. To my customer, it’s not. He has proof that he can do it in the couple of business clients he has. He has proof that he doesn’t have to change his set up. He’s already done the marketing that’s required (He did it without paying attention, by accident, it’s true, but he’s done it.).
The only thing he has not got is accurate thinking.
The point of this: most of my clients have hang ups. Some have less drastic consequences. Do you? Do you let fear and inaccurate thinking prevent you from having a better business, a better life? Marketing for small businesses is not just about coming up with ideas for ads and sales letters. It’s about everything you do.