It’s Spring…Is there pruning to be done in your business?

Spring is just around the corner, anyone with a green thumb is getting anxious to spend more time outside in their yard.   There have also been several studies that confirm the health benefits of having a green thumb , so you’re very likely to find yourself in better shape all the way around with a good pair of pruning shears in your hand. There’s a similar process in business, every so often, there’s a need to prune the vines in your business in order to keep it healthy and growing. And sometimes that includes pruning vines that are still producing fruit (profits).

That’s the case with one of our Aspire clients recently.  Their dilemma was that they had a long-standing customer who was no longer a good fit for their business model.   If you haven’t been in that situation, it can be a very difficult challenge to acknowledge and address.  On the surface, things looked good. The product our client was delivering was profitable and their customer would agree it was a good value. In fact, their customer would probably say the product they deliver is one of the best in their industry.

The challenge was more on the back-end. The resources it was taking to manage this customer were negatively impacting other areas of our client’s growing business. That doesn’t mean the customer had done anything wrong.  It simply means that our client has recognized you can’t be all things to all people.  And as much as they value their business relationship with this customer, there is probably another company better suited to deliver their needs moving forward.  Ultimately, they just outgrew this particular client.

 

Are you too quick to say yes?

It is actually one of the biggest traps businesses fall into, especially young businesses.   They are so eager to grow their businesses they go after every opportunity that comes their way, even when it isn’t a good fit.   For startups on a tight budget it may actually be required; you’re trying to keep the lights on and every penny counts.    But long term this can actually be a disservice to both your business and the customer who really isn’t a good fit.

Have you ever seen a handy man ad?  They often intentionally promote themselves as a “Jack of All Trades”.  Their ads may list everything from raking leaves to washing windows to re-stretching carpets to performing plumbing repairs; they’re the Superman of services.   But the reality is most handy man services are single person operations.  One of the main reasons they’re solo is they say “yes” to almost everything and it’s a model that is impossible to scale overall.  It keeps them from landing bigger jobs. So although a good handy man can tackle a leaky faucet, it is unlikely they would be a candidate to redo the plumbing of an entire house.  It just isn’t a good fit.

When is the last time you reviewed your current customer list?  Are there customers you are currently providing a product or service to that….

  • Have profit margins that are significantly lower than your average customers?
  • Require additional resources not required by your ideal clients?
  • Emotionally drain you or staff when working with them?
  • Require a significantly different approach to manage compared to your ideal customers?
  • Make you cringe when they call or email you?
  • Do not align with the values and culture of your company?

 

If you have answered Yes to any of the questions above regarding your current customers it may be time to dig a little deeper and ask yourself if they are really the best fit for your business and if your business is the best fit for them.  Chances are you will be doing both parties a favor by getting out your business shears and performing some spring pruning.

Prune with care.  But… just as any Master Gardner would suggest caution, it is important to prune with care should you start severing ties with any of your current customers.  If you can, try to provide alternatives that may be a better fit for them (and you).   You may be able to form a strategic alliance with another company that is better equipped to fill their needs.   That creates a win-win-win for your customer, your business, and your strategic partner.   But whatever you do don’t leave your customer hanging without any help, prune with care and you’ll be able to keep your reputation and improve your service and bottom line.

Have you ever thought about this?   Is growth in your niche market being constrained by customers you no longer have a strategic alignment to serve?   Are you hurting or helping your business and your employees by continuing to work with them?   Spring is coming, maybe it’s time for a little pruning?

As always, we value your thought in the space below.

Chris Steinlage Kansas City Business Coach

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