For companies that are actively involved with clients, picking the right clients to supplement the growth of your company is always a hard task. One of the first things that a company must understand in this instance is the need to find their niche and stick to companies that coincide with that spectrum. Clients outside out this niche might do your business more harm than good, which is why narrowing down to the right ones is always essential.
But when a company goes down this path of picking out the right clients, they do face a few hurdles along the way, mainly, one referred to as the client gap. When a company is trying to pick clients that fit their specific niche, they are often stuck with finding clients that pay them well but aren’t as beneficial to the growth of the company, and clients who are a benefit but don’t pay as well. This gap only widens with time and as the company progresses if not properly taken care of. This can sometimes create bigger problems when companies are faced with the prospect of having to either give up old clients that may not pay as well, but merely because they have been a part of the company for so long.
So how do companies tackle this idea and find a workaround? The answer is simple. Adopt an 80/20 rule. Most top companies that work directly with clients work around the 80/20 rule as it helps keep their business going while maintaining an image that is vital for their development. The 80/20 rule refers to the idea of having eighty percent of your company be clients that pay well. However, these clients still need to be within, or at least close to your niche that you are tapping into. Having clients that pay well translates into better revenue for the company, which in turn can help its development significantly. The other twenty percent of the clients that a company has should be reserved for older clients, and also those who are beneficial for the growth of the business, but don’t necessarily pay well. Even though the revenue generation from this bracket might be proportionally lower than the former bracket, these companies will help improve your prospects of getting better clients, who potentially pay better in the future.
This plan can also be adopted when a company is trying to increase their revenue generation. One of the ways to get better clients is by giving them a higher estimate of your services, and a new plan of action to get you into your preferred niche. It is always better to work with clients that synergize well with the company as opposed to ones that don’t. If a few clients back out, the chances are that they would stunt your growth in the long run, so it becomes better to drop them now and make a place for a client that is potentially willing to pay more for the service that your company offers.