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How Do You Define Your Ideal Customer?

Author: Jim Carr
Published On: May 25, 2022 12:00:00 PM

MC 314 Blog Image

How do you decide who the right customer is for your manufacturing business? How do you choose where to allocate your time and resources? The article, “Gaining Customer Traction: 5 Steps to Customer Growth,” covered some ideas that you can use to gain traction. In episode #314 of MakingChips, we talked about each of these points and how they could be applied to our businesses. 

Step #1: Focus on solving problems

A successful business solves problems for its customers, right? The three variables that we always deal with that customers want us to solve are delivery, quality, and price. If you niche down to your ideal client, you can and should give them everything they want and make them raving fans. You don’t want to position yourself as someone that’s “game for whatever.” Is there a problem that you’re uniquely qualified and equipped to handle? Niching down can help you define your ideal customer.

Step #2: Focus on sales—not vanity metrics

Vanity metrics are things that sound good—like website visits or white paper downloads—but don’t provide actionable insights into how your business is growing. The real problem is that most vanity metrics don’t provide meaningful data on customer traction. Sales do. Conversions are data that you want to track. Nick argues that some vanity metrics matter because they can lead to a sale. 

Step #3: Get the word out about your business

In the beginning stages, you need to do everything you can to get the word out about your business because your potential customers just don’t know about you yet. An online presence can help them find you. What else can help? You could try cold emails (though we don’t love this strategy). You could join HARO and partner with a journalist for free press. 

Depending on your business, you can even offer product(s) to potential customers for free in exchange for feedback or reach out to influencers about potential partnerships. Whatever you do, always focus on how you can provide value and make your offer relevant to that person. 

Step #4: Improve your customer retention

The author goes on to say, “Customer retention matters because it impacts your ability to scale. When retention rates are low, acquisition costs will continue to rise as you grow. If you want to bring on investors, they look for high customer retention rates.” If you can’t retain customers, is that a hint that you’re going after the wrong clients? Or that you need to focus on customer retention to keep the clients who are the right fit? 

Step #5: Track your analytics

It’s important to track your analytics. You’ll identify things that are negatively impacting growth. Knowing your numbers can also help you capitalize on positive trends. If a subsection of your audience is converting higher than others, it can help you find ways to convert more customers and grow your business. Tracking analytics helps you determine where you need to improve and become more efficient. 

How we filter our customers at Carr Machine & Tool

The first thing we do at Carr Machine & Tool is focus on our values: Our people, technology, and communication. Does a potential customer align with our core values? If they don’t value all of those things, we cut them off right away. 

Secondly, we weigh them by who is the easiest to do business with. If they’re demanding and “Need a quote in 12 hours,” they won’t be a good fit. They have to be realistic. We also need to enjoy the work we’re doing. What work are we passionate about? Those are the filters we use to determine the work we take on. 

Jason looks for a willingness to learn from prospective clients. If they ask how he can help them solve a machining problem, that’s their ideal client. That means that they’re willing to outsource expertise to ZENGERS. They’re not trying to say they know better. 

The bottom line is that you and your shop floor need to align on a mission. That will drive profitability. Do you know what type of work will be the most profitable for your machine shop? Listen to episode #314 of MakingChips to hear the full conversation on how to choose the right customers for your business.

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