Target Market Definition
Volume 12, Number 19
Issue 567
I have previously advocated that every successful business must precisely define their particular target market BEFORE focusing on the goal of being the pre-eminent provider of their particular service to that well-defined target market. In other words, how can you be a successful business if you haven’t defined the parameters of who your customers will be?
A lot of businesses fail because they spend too much time touting their horn about how great their service is to EVERYBODY rather than to specific potential customers contained in a well-defined target market population.
Specifically: First define who your customers will be and then perfect your service and service delivery to them rather than trying to be everything to everybody everywhere.
At the great risk of giving to much away to my rivals in the marketplace, I will use my own target market definition as an example:
My target market is composed of the individual and corporate citizens of north-western Chesterfield County, Virginia who have complex income tax filing requirements and recognize that the successful completion of their tax return is a cooperative venture where ideas and information are freely exchanged in a spirited and reflective manner that recognizes that the delivery of tax preparation and accounting services is more of an art than a science.
This statement means that I cannot be everything to everybody. People who really know me know that I live this statement everyday. Living by this statement lets me be able to do one of the hardest things that the best professional has to do every now and then--say “no.”
I have directed a lot of discussion in my writings to attracting clients and keeping the clients that you have. Let me state the obvious in case you have missed it: It’s impossible (and not smart) to serve everyone and if you try to, you will take so much passion and enthusiasm from the best clients that you have while you try to serve the worst.
Having that well-defined target market definition allows you to have the internal control on yourself to say “no.”
Each year at the end of busy season I look through the client database and choose clients that I feel I shouldn’t continue serving for one reason or another. Almost always, it’s clients who have “snuck-in” (so-to-speak) who are outside of the parameters of my definition of my target market.
While I’ll make exceptions to my target market rule when the people are great and when the assignment is lucrative or when people are in real trouble or I feel I am a unique solution, I never want to deviate from my target market definition as a general rule. The clients that I feel that I can’t serve anymore get counseled-out in various ways including, but not limited to, being written disengagement letters, being dropped from my mailing lists and/or are notified that a counseling session is necessary to discuss my continued service.
Most people who allow me the honor to prepare their returns are savvy enough to have reached the point in their lives where they realize that they attract more flies with honey and not with vinegar. Clients that somehow sneak-in to my portfolio who are hostile, rude, aggressive, unforgiving and/or arrogant will be de-accessioned as quickly as I can develop a non-threatening strategy to do so.
Retaining clients who are simply not fun and exciting and happy people zap so much passion and enthusiasm from me that I start insulting the ones that are a joy to serve because the bad ones take my ability to serve the good ones away.
All businesspeople can think about their client portfolios and think of a few of the pushy and hostile ones who zap the passion and success away. My Dad used to try to explain to me that it’s impossible to make these people happy. He said that “we are their entertainment.” Actually, I think that it’s deeper than that--I think we are part of their blame-shifting strategy for their own problem.
Personal responsibility is something that each of us must bear. I’ve spent a lot of time working with contractors on some historic buildings that I am restoring. They can’t restore the building by mind-reading. I must disclose to them all the facts that I know and all my ideas about what I think that they should consider. They recognize that, together, we make a better product by brainstorming together in a cooperative way. If they make a mistake, I’m forgiving because that is part of the process. Mistakes are the by-product of success. If no mistakes or “re-dos” EVER happen, that contractor isn’t being creative and aggressive enough. I want a creative and aggressive contractor, so I must recognize that there will be some bumps along the journey.
In my professional life as a tax and business adviser, I want clients who understand that there will be bumps along a journey. I want the type of clients who know that spirited cooperation in an artistic way is the ONLY way to achieve any goal worth having. If they turn the “P” in “CPA” into “Paranoid” (instead of “Public”), they know that I will be too scared of their potential wrath to be creative and aggressive towards mutually-agreed-upon goals.
David B. Robinson, CPA
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