Pro Networking Tip #3: Identify Your Ideal Client for Better Referrals

Pro Networking Tip #3: Identify Your Ideal Client for Better Referrals

Trout Payment Systems 3.26.2014

Often times during networking functions I will hear people say that anyone is a good referral for their business. In the off chance that statement may be true, it is still not the most effective way to solicit referrals.

Many of the people I encounter are small business owners or are sales professionals that work in service and customer relationship oriented businesses which means they really should concentrate on higher pay off clients and not attempt to be everything to everyone. They are not Walmart or Best Buy, who by the way, have target markets and within those markets, market segments. One exercise that can help clarify your ideal client, and by extension help in defining to people who you want them to refer to you, is to look at customers on a grid of maintenance vs. profit margin.

In the grid above, you have low maintenance high profit margin clients. Wouldn’t that be your ideal client? They pay you a lot of money and your upkeep is minimal. Next, you have your high maintenance high profit margin. You make a lot of money off of them, but they make you work for it, which is fine because there is a very healthy margin. Next you have your low profit, low maintenance client. You don’t make much off of them but they don’t ask for a lot so it’s still a good client to have. Lastly, you have your high maintenance low profit margin account. These clients are difficult if impossible to please due to the type of service that they require, or perhaps because of their attitude and the way they do business. To top it off you are not making much if any money with this type of account, and in fact could be taking a loss.

When you ask for a client, do you really want people to send you high maintenance low profit accounts? Not if you want to stay in business for long. Whatever your business may be, figure out what type of clients tend to fit into these categories.

Maybe you only want to work on high profit margin clients, the next thing you want to determine is what kind of people tend to know those high profit margin clients. This is part trial and error as it never hurts to ask, but you also have to play it smart and focus on networking groups that have a greater chance of connecting you with your target clients.

For instance, I am interested in doing business with Mexican firms expanding into the US. Although I am in several local chambers of commerce, the chamber that puts me in the best position to meet those kinds of clients is the US Mexico Chamber of Commerce. That is why I am working on developing relationships with the chamber leadership, which is an ongoing effort.

Only you know what is best for your business. Figure out who your ideal clients and position yourself to ask the right people for those referrals. 

Napoleon Butic is the CEO and founder of Trout Payment Systems, a merchant services provider focused on hooking Houston area businesses up with the best deals and service on debit/credit card processing. For more information visit troutpays.com  or like our Facebook Page. https://www.facebook.com/TroutPaymentSystems