Get Rid of the Deadbeats

Stop wasting your precious time, money, and energy on deadbeat prospects. Get rid of them, and focus on the people who are willing to give you their money.

First: focus on attracting the very best prospects in the first place. Look for the people who will come back and do business with you as often as possible for the longest possible period of time.

Second: prioritize. Those who have recently spent the most money with you, or who buy from you on a regular basis, are the best prospects for any new, related offer you make. So separate your better customers from the rest and prioritize them.

Third: provide variations on a theme. Develop new products and services that are as closely matched as possible to what people have already bought from you. Try to find ways to give them more of what they bought from you the first time. Invent products, services, and opportunities things that look different from what you've produced before, but have recognizable similarities.

Fourth: try to move the larger prospect group up the ladder, while spending the majority of your time and money on the smaller group of highly qualified prospects.

The last point puts a cap on the fourth: think of your entire customer base, and the prospective buyers in your marketplace, as a pyramid. Visualize the smaller group of your very best customers at the apex. Everyone else has a place in the rest of the structure, which widens toward its base. Your #1 strategy is to do all you can to increase the size and quality of the group at the very top of that pyramid. Once you visualize that, and once you have a system for prioritizing and determining who your best customers and prospects are, then your whole job is to develop strategies that get more of those people in the select group up at the very top.

Always look for ways to turn as many people as you can into those best customers, while trying to clearly identify who, in the larger group of people toward the bottom of the triangle, are good prospective buyers but have never bought from you before. To do that, you have to adopt a ruthless mindset, so you're not wasting your time or money on deadbeat prospects. These people are essentially a tire kickers, people who are unlikely to buy from you.

In an earlier article, I discussed how marketing is like fishing in some ways. Well, a dead fish isn't likely to bite, is it? Sadly, a deadbeat customer is like a dead fish floating in the water. Sure, they're there, but they won't do business with you. One reason you have to find ways to separate out your customers is so you know who your deadbeats are. Then you can avoid them.

You always have to weigh the costs of the marketing versus the number of sales you make. You also have to take into account exactly what you're trying to do. If you're doing new customer acquisition, you're talking about acquiring new customers at a loss-spending money to buy and invest in future profits through customer acquisition. That's something different. But if your intent is to serve your existing customers and to continue to make a profit off them, the way you do that is by focusing on the very best of them.

When I consider the value of someone on a mailing list, I start with how recently the person has bought something. It's better to have a list of a thousand people who bought something from you last month than a million that haven't bought anything from you in five years. So if you've been in business for five or ten years, don't look at all your customers as being on your preferred customer list. They might be on your general customer list; you might mail something to them occasionally to try to get them to come back, but they won't be your best customers.

Consider building a preferred customer list of people who have bought from you within the last three months. How many of those customers do you have? By and large, those are your better customers. Or segment out the people who have been in the store at least four times in the last year.

Next, try to increase the size of this segment by moving your larger prospect group up the ladder, while still spending the majority of your time and money on the smaller group of the highest qualified prospects. If the idea of a triangle doesn't work for you, think of it as a ladder. At the very top you've got all your preferred customers; your regular customers are in the middle, and your deadbeat customers are hanging onto one of the bottom rungs. You're constantly trying to get people to move up to another level by making them the right offers.

Simultaneously, you're making special offers available to your preferred customer list, the people who've already climbed to the very top of the ladder. You're treating them like royalty in an effort to keep them on that list-because otherwise, over time people will drop off it. Some will no matter what you do. If you've got someone at the top of the ladder and they haven't bought from you in a year, then you probably need to knock them down a bit. You've got to constantly monitor that list and adjust as you go.

You don't want them to drop down, though, so constantly make offers to your best customers to keep them in your preferred list, to continue to build that relationship that you already have with them. They like you; they trust you. That's why they're there in the first place. Meanwhile, keep trying to get more people to move up that ladder by making special offers to them. Occasionally-say, once a quarter-want to make them a 'why haven't we heard from you in a while' offer. You sometimes see catalog mailers tell you they can't afford to keep mailing you a catalog unless you buy something from them. Sometimes they're lying; sometimes they mean it. You need to mean it.

Some people will be hanging out in the middle of your ladder. They're not your best customers, but they're not deadbeats either; and that being the case, you need to make them offers to try to get them more involved, to get them to purchase things more frequently. You should constantly be in a state of moving the people on the ladder.

But be careful here; the ladder can become top heavy of you allow it. Going make to the pyramid metaphor, it's possible to flip that pyramid upside down, so you risk having too many people as your best customers.

You might end up with thousands of great customers and a tiny number of average ones. That's what you want, but it's never going to stay that way, is it? You can't defy gravity for long. Typically, a list like this isn't quality anymore. That's a terrible mistake, because succeeding in business isn't just about having numbers: it's about having good numbers. It's not just about having the biggest customer list possible; it's about there being a significant reason why those people are on the list.

One thing that you often see, sadly, is companies trying to lower the bar so they can consider more of their customers good customers. They end up with a preferred customer list who isn't as responsive as it used to be, because they have too many people on the list who don't deserve to be there. You have to make them earn that position! Set a time or spending qualifier, and set it high enough that not just anyone can achieve it.

Otherwise, your list may soon become less responsive and, therefore, less profitable. You've just shot yourself in the foot, because the people on that list have less affinity for you.

So while the goal is to build that pyramid as big as possible and to have as many customers as possible at the top of it, you do have to maintain the proper proportions. You always want the biggest part of the pyramid to be the base, representing the general customer base. The way to build a larger set of preferred customers is to build the whole pyramid bigger, to allow more people to flood in. Some will be average customers; which is fine. That's the way it is. You have to work hard to build up your relationship with them, because that's where your pool of preferred customers comes from. Everyone else you can let drop away.