Weekly Business Idea

June 2, 2017 – Who is Your Core Customer?

Posted on | June 2, 2017 | No Comments

Main Idea:

Do you have a good handle on what types of customers buy from you?  Do you provide a range of services to those customers?  Do you know what your profitability is by product line and by customer?  Do you like your customers?  Or, do you groan when a customer calls your office?

Expansion of the Idea:

When I was in high school and college, I worked in an Italian restaurant.  It was a small local chain with good food but great pizza.  Celebrities used to come to the restaurant when they were in town.  On certain days like New Year’s Eve, the kitchen would be completely overloaded.  That was the only time that the owner would come down from his offices to help out in the kitchen.  However, it didn’t matter where the biggest backlog was, he would only help on the pizza line.  That was what he cared about.  He knew that his business was tied to keeping the customers that loved his pizza happy.  The rest of the kitchen was important but the pizza line was critical. The owner knew what his core customer cared about and why they bought from his business.

Most small businesses, and CPA firms are small businesses, need to know who is their core customer.  Before I really understood this, my client selection criteria consisted of whether a potential client could afford our services or if we need the business to keep the staff busy or something like that.   And I tried not to take on any jerks.  Every time I took a client that I knew wasn’t a perfect fit, I regretted it later.  I finally started to identify what I wanted in a client.  I also started to eliminate services that I was perfectly qualified to perform but didn’t fit my vision for the business.  After doing this for a while, I zeroed in on who my core customer is and what they want.  I understand this customer much better because I am focused.  This allowed me to do the following:

  • It simplifies my marketing and branding decisions.
  • It allows focus on my services.
  • It provides boundaries for other services.
  • It allows us to become experts, whether we call ourselves that or not.
  • It provides a decision path for accepting new clients or terminating existing clients.
  • It improves profitability because I am focused.
  • It allows for better training of my team.

The best part of this whole process is that it shifts us from identifying ourselves by what we do to who we serve.  When you start having an outward focus, it changes your business in ways that are hard to imagine and harder to imagine ever losing.  I think my clients have benefited from this increased focus.  I know that my firm has benefited.

Whenever I have discussed this with various small business owners, almost universally they say that it is impossible to have just one type of customer.  They sell to a variety of types of customers or they might have multiple business lines.  They cannot narrow their core customer to one type.  There are valid business reasons to have different lines and types of customers.  However, everything needs to revolve around your main customer.   My core customer is a small business owner.  However, I do serve individuals by doing tax returns.   My team understands that our primary focus is the small business owner.  We cannot let the individual tax returns impact our service to the small business owner.  This provides clarity to everyone in my firm.

Points to consider:

  1. Do you have a clear understanding of who your core customer is?
  2. Do you have an intimate understanding of their operations or what they use your product or service for?
  3. Have you discussed this with your team?
  4. Have you evaluated the profitability of your customers and product lines?

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  • About

    These weekly ideas are brought to you by FitzGerald & FitzGerald P.C. For more information about how to use these ideas with your small business contact Tim FitzGerald at trfitz@fitz-net.com.