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Talk about the art and science of business development: Stories and details to earn new clients or accounts, gain a competitive advantage and find your success.
When it comes to business development, some decisions have a much greater impact on your bottom line than others. And some mistakes, if you make them, will hurt your ability to grow far more than others. Today’s topic is one of those critical decisions: defining your target market, and doing it with precision, to fuel the growth of your business.
"Welcome to the Finding Business podcast, where every Sunday, in just five minutes, you'll learn something new to attract ideal clients and accounts. I'm your host, Scott Channell. For more episodes and information on services offered, visit scott channell with two T's, two N's, and two L's dot com. Now, onto today's episode."
Let me share a true story that illustrates the importance of this. Over the years, I worked with many companies in a specific industry. By analyzing those who actually bought from these companies, we uncovered a game changing fact. Fifty percent of what they considered their "ideal clients"—the customers who paid well, generated high margins, and had the highest lifetime value —came from just 3% of their total target audience.
Let me repeat that. Half of their best customers came from only 3% of the larger audience they were targeting. So, for example, if their target market consisted of 50,000 potential buyers, just 1,500 of them were responsible for delivering half of their most valuable clients.
Now, here’s what consistently happened: businesses that focused first on that top 3%—the high-probability group that delivered the bulk of their business—sold more, sold faster, and did it at a much lower cost than those that didn’t.
It makes sense, right? If you know that a small fraction of your market delivers outsized results, and you have limited resources in terms of time and money, wouldn’t you invest those resources where you’re likely to get the biggest return? Prioritize the top group first, then move on to the next best, and so on.
Sounds like common sense. Yet, many businesses fail to define and segment their target market into priority groups. Some don’t know how. Others don’t realize they don’t know how—and they’re left wondering why they’re working so hard for so few results.
Even when presented with clear data showing which groups within their target market are the most responsive, some businesses still refuse to prioritize. They make a self-defeating choice and say something that’s almost guaranteed to lead to poor results: “I don’t want to miss anyone.”
By trying to not miss anyone, they choose not to focus first on their highest-probability groups. It’s like saying, “I know I could dig into a solid vein of gold right here, but I’d rather roll around in a pile of dirt over there because it might contain a few nuggets.” It’s a costly misallocation of time and money.
Here’s the key takeaway: if you define your target market tightly, segment it by the likelihood of success and client value, and prioritize the highest-probability groups, you don’t have to be perfect at everything else. You can be average at messaging, scripting, and outreach, and still do well.
But if you cast your net too wide, trying to reach everyone, even the best messaging and sales strategies won’t save you. You’ll struggle to grow your business and improve the return on your business development efforts.
Hope this got you thinking.
For more information about this podcast, show episodes and services, go to Scott Channell with two t’s, two n’s and two l’s, dot com.
Thanks for listening