Why is it that so many business owners and sales professionals put forth focus and effort toward obtaining the business of small, low-margin clientele, while completely ignoring the high-dollar “big-fish” opportunities?
Much could be said on this topic (and rightfully so) from a philosophical perspective.
Shoot for the stars. Be all that you can be. Dream big. You know the feel-good stuff I’m talking about. And it’s good stuff, but let’s look at some practical, and dare I say logical reasons why aiming too low when prospecting for new business could be costing you precious time, money and opportunities.
I’ll take one large client over 10 small clients every time.
Most service industry businesses are more profitable when servicing a single $50,000 client compared to 10 $5,000 clients. This fact is typically true even when per-unit pricing is the same. The big difference in profit isn’t from the large client paying more per hour, per unit or per whatever we’re selling. It simply costs us more to serve 10 $5,000 clients than it does to serve one $50,000 client.
It’s much easier to manage one account than it is to manage 10. Business owners, sales professionals and account managers do a much better job managing relationships when their time is focused on fewer, larger clients. Better customer service is often a byproduct of managing fewer, larger accounts. It’s a matter of focus and the intelligent allocation of resources.
Need something more tangible? Both the direct and indirect costs associated with serving large clients will be considerably less when compared to serving a handful of smaller clients.
Oddly enough, there is less competition going after the big fish.
Service industry business owners and sales professionals have been complaining for years about how much competition is out there. Well-established landscaping companies, for instance, are famous for citing ease of entry into the industry as a primary sales challenge. These same folks will complain about having to compete with smaller Ma-and-Pa operations who are “low balling” all over town. Here’s a crazy idea: What if we targeted a completely different set of prospects, a type of clientele that almost no one is going after?
There is a lot of competition out there. I’ll admit, the smaller and more price-driven prospects have seemingly endless choices when it comes to service providers. But you might be surprised to learn the big fish have very few competing for their business. Many business owners and sales professionals aim far too low in their prospecting efforts. Perhaps it’s a comfort zone issue. Perhaps it’s a confidence issue. Or perhaps going after the high-dollar big fish takes more time, more focus, more effort and tremendous confidence in the product or service one is selling. Whatever the reason, if you’re aiming too low when prospecting, it’s almost certainly costing you a lot of money. We can’t expect something different if we’re going to do business like everyone else.
Big fish have big budgets.
At the top, where the competition is few, purchasing decisions aren’t made on price alone. Big fish buy value, not price. Big fish buy for other reasons that are uniquely important to them.
I’m not implying that you’ll encounter a plethora of prospects who proclaim money is no object. But unless your business model is to sell on price, why would you spend your time on prospects who buy primarily on price? I should mention, size and purchase price alone does not qualify a prospect for big-fish status.
Big fish are well connected to other big fish.
Most business owners and sales professionals in the service industries will tell you their best source of new business is from word-of-mouth and from referrals. Big fish are well connected to other big fish. If we’re going to rely heavily on word-of-mouth marketing, and growing our businesses from referrals, doesn’t it stand to reason that we should be networking with, proposing work to and working for the type of people who can introduce us to more of the type of people we want to work with? Clients who buy on lowest price refer prospects to you whom are also looking for the best price. Big fish who buy value, based on their unique needs, can introduce us to other big fish with similar purchasing practices.
Doing business with big fish offers a distinct credibility.
Buyers are often influenced by the type of clientele we’re already doing business with. In the eyes of most purchasers, we’re best equipped to work with the type of people we’re already working with. This is one of those times when perception is everything. If you work primarily with small, low-budget clients, you’ll have a difficult time convincing high-end prospects you’re their best option. Remember, it’s not what you can or can’t do. It’s not how qualified you are or are not. What matters is how the type of prospects we want to work with perceive us as a service provider. Being known for doing business with big fish will create new opportunities with other big fish. Sometimes it’s just that simple.
If you’re aiming too low in your prospecting efforts, it’s probably costing you and your company a lot of money and significant organic opportunities. Go for the big fish. Stop fighting for low-margin work in an arena with endless competition. There’s much less competition at the top, and the checks go a lot further.
