The gentoo penguin is the fastest penguin in the world. It can swim at speeds of up to 22 miles per hour (35 kph) - about the same speed as running the 100m sprint in 10 seconds. Considering that these guys are only 2 to 3 feet tall they're really, really fast.
One of the things that help the gentoo penguins swim so fast is the act of porpoising - diving out of the water in shallow leaps. These leaps cause their feathers to become coated in little bubbles when they enter the water again, which in turn reduces water friction and helps them swim faster. (They also do this to avoid predators and, as some scientists believe, out of the sheer fun of doing it.)
Just like the gentoo's have evolved special techniques to swim really fast, there are things you need to know about to identify high-value clients. Today we're going to look at three of them:
- high need;
- ability to pay; and
- good fit.
But what's a high-value client?
Before we dive into those three things, let's first take a look at what a high-value client is. Don't think that high-value clients are those that can afford to spend thousands or hundreds of thousands of dollars on your products and services. Those types of clients are really nice to have - but there are very few of them around.
High-value clients are simply clients who can pay for one or more of your products or services and come back for more. The more they buy from you, the higher their value. Their LTV (Lifetime Value) is high.
Sometimes you find a client who buys from you, but then sucks up way more of your time and energy than is warranted by the purchase they made. They are not high-value clients - the profit you make from them gets smaller and smaller every time you have to spend time with them outside of the scope you promised to deliver.
With that out of the way, let's take a look at those three things.
High-value clients have a high need. They have a problem that needs to be solved, it is causing them a headache and they have to solve it to meet their needs or be successful at what they're doing.
A high need does not have to mean a big problem. I can tolerate even bad coffee for a while, but when I really need a good cup of coffee I will (literally) go the extra mile for a good coffee - and pay a premium for it. While this may seem like a small problem to most people, it is important enough for me to make it a high need. And when there are enough people like me who "need" a decent coffee there's a pretty decent coffee shop business to be had.
Ideally, that problem is also an expensive one. The more expensive the problem is for your clients the more you can charge for your services. Of course, that means that your clients should be able to directly relate the problem to a lack of revenue or diminishing profits - or something they can put a value to. Sometimes that value can be measured in currency - other times it can be measured in personal ambition or satisfaction (as in the case of a good cup of coffee).
They know they have the problem. If you're trying to sell a solution to a problem that your clients don't know they have, you first have to educate them that they have that particular problem. And this puts a barrier between you and your potential clients - you first have to educate them. And it's only after you've educated them that you can offer your solution.
So high-value clients have a high need for a solution to a problem that is expensive to them, and you don't have to educate them that they have that particular problem.
Ability to pay
High-value clients are able to pay for your products or services. And for you, this is both a problem and an opportunity.
Initially, you don't know (and don't care) if they can pay. When you attract clients you don't know whether they're able to pay for your products or services. And for a while at least, you don't care whether they're able to pay or not - you're in the process of building up trust before they're ready to buy.
But this can become a time-suck if you're delivering expensive products or services and you spend a lot of time and effort on potential clients that actually can't pay for your services. When you enter this kind of high-intensity lead nurturing you need to have some way to test whether they're able to afford your services.
One way to do this is to publish your prices. I know a lot of people are scared of doing this - they're afraid it might push potential clients away before they really understand the value of what you're delivering (and allow the competition to undercut them). And there's some truth to this of course. For my money, I would rather publish my prices up front so that I push away those clients that definitely can't afford my services.
You can also give a range of pricing. Another way to determine if someone can afford your products or services is to provide them with a price range. If, for example, you said "my services range from $2,000 for a roadmap to over $20,000 for a 3-month engagement - does this fit into your budget?" you would very quickly get a "no" from those people who are wildly outside of that range.
But this is also an opportunity Just because someone can't afford your expensive consulting services does not mean they're gone forever. This is actually an opportunity for you.
Rather than send potential clients on their way if they can't afford you, is there a version of your services they could afford? If you offer consulting services, is there a group mentoring program you can deliver to multiple clients at the same time at a lower cost? Or a DIY guide that will cost them even less?
High-value clients are also a good fit for you, your business and your style of working.
I will never deal with people or businesses that are unethical. They're simply not a good fit for my values. I know that if I do work with them I will spend more time being frustrated at their lack of ethics than I would delivering a high quality services. In this case, the fit is based on my values.
But there are other kinds of fit. My friend Sean is one of the best entrepreneurial coaches in the business. Because he works one-on-one with clients in a trusted, confidential and intensive setting, personal fit is very important to him and to the breakthrough success he can deliver to his clients.
A fit based on size. Sometimes the fit is based on the size of the organization you're dealing with. For my corporate work, the best fit for me is an organization where I have direct access to the CEO. On the other hand, articles like this are targeted at solopreneurs and small service businesses - usually less than 10 people.
A fit based on geography. You may have a business that requires you to deliver your services or products to your clients in person. In that case, the fit is based on how far you're willing to travel - and how much your clients are willing to pay to get someone to fly in from afar.
It doesn't matter what kind of business you run, there's always a good fit and less good fits. Figure out what profile you need your clients to match before you start pitching to someone you may not want to work with.
Are these the only criteria?
Of course not. Your ideal clients may also belong to a particular industry or be using a particular technology. But the three base criteria still hold - they still have to have a high need, the ability to pay and fit your willingness and ability to service them.
You're the emperor of your world. We often think that we have to be able to work with anyone who approaches us with a problem even remotely resembling the types of things we can help them with.
But you are the emperor of your world. You can decide who you want to work with, when you want to work with them and how you want to work. You get to decide - and when you know how you're going to decide you will deliver a better product or service to people you like working with.
In this article, we covered three things you need to consider when identifying high-value clients:
- High need: your high-value clients must have a high need for something - a problem they have to solve. Ideally that will be an expensive problem, and you shouldn't have to educate them that they have the problem in the first place.
- Ability to pay: High-value clients have the ability to pay for your services. You can determine this by publishing your prices or asking them what their budget is.
- Good fit: Your high-value clients must fit your values, the size of business you're ideally suited to work with and be within the geographic area you're willing able to service.
These are not the only criteria for high-value clients, but the are the base from which you have to work.
Swim like a gentoo penguin
Gentoo penguins have evolved the ability to swim really fast by employing techniques like porpoising.
Just like they've developed those techniques, you have to identify the things that allow you to deliver high-value products and services your clients will value.
By focusing on high-value clients you will be able to deliver higher-value services to people and organizations that are ideally suited to your skills, rather than chasing anything with a pulse and a credit card.