Sunday, January 20, 2008

How firing your customers can lead to bigger revenue

Restricting yourself to concentrating on one market segment can be loosing you money. This is especially true if you are completely missing a larger market or multiple markets. If you are not flexible enough to change with the market or see other markets your company will not grow. So sometimes firing your customers can lead to bigger revenue by opening up more or larger markets. Companies need to evolve to meet new markets needs, concentrating on the old market can prevent you from making necessary changes for your company to grow or survive. Firing some customers can also let you focus on or finding clients you have a better profit ratio with.

For years I concentrated on one market, and I did very well. I was marketing to a specific historical re-enactment hobbyists group. It was a great fit; I had found my niche in the market place. Then I realized that there was a much larger market for my product. There are a lot of other re-enactment groups and live role-play gamers to market too, so my target market grew. Then medieval and fantasy became big in the general public over the last few years with all the epic movies that came out. Now there is a resurgence of the vampire and werewolf theme with all the movies and TV shows coming out. So my market is growing and changing. I have to be flexible to change with it. I thought I was doing this.

Then I realized that I had been restricting my self to still meet the historically accurate standards set by my original target market. Some of the customers in my expanded market place would be interested in those products but I was not taking advantage of the full potential of that market. Most of that market likes the look but don’t care about historically documentation. So I had to re-evaluate who I was marketing to, what was my real customer base. I found that my old market was not willing to pay the same prices that other markets are, so I was no longer limited to a specific price range. My old market I had a limited product, slower sales and a saturated market. It was no longer cost effective to continue catering to that market. Firing my original customers opened the doorway for me to change and increase my product line. Meeting the needs of the larger market resulting in an increased profit margin.

I had also been concentrating on selling at local festivals, events and stores. I did not recognize the international interest that is out there. So again I had to re-evaluate to where I was selling, and what methods I was using to sell. I have not stopped selling locally but I have expanded the market by opening a store on line. However, these are two different markets needing completely different marketing strategies. These days I do not limit myself to just the market I perceive to be there. I am actively searching for multiple markets, and the methods to target them.

My business is retail so I do not have to deal with slow payers or no payers. These are the other customers that it pays for you to fire. Why keep clients that are reluctant to pay for product or services once they have them when you can concentrate on ones that do pay. Every business has to change and grow as the customer base evolves with new trends, needs, technology and competition always finding new ways to take our customers.

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