In the early days of your business, you were overjoyed for each and every customer you added to your book of business. However, as your landscape company grows, it can quickly become apparent that not all clients provide the same value for your business.
You probably know your A-level clients are. These are the accounts that bring in strong revenue, value what your business has to offer and give you minimal headaches. If you could clone them, you would.
Who Are Your C-Level Clients?
On the other end of the spectrum are the C-level clients. They generate a negligible amount of revenue and require a disproportionate number of resources to keep them happy.
Some of the common characteristics to look for are accounts that are high maintenance, inconsistent with payments or seek out low-margin services on short notice.
C-level clients tend to be price-focused and are not loyal to your company.
Why Focus on Your A-Level Customers
It can be tempting to just keep all of your customer base as any cash flow can help but choosing to focus on your top-tier clients can result in increased profitability. As you bring in higher revenue from fewer clients, you can reduce overhead and allocate your resources to keep your premium customers happy.
As you are able to spend more time on your A-level and B-level clients, you can pursue upselling opportunities and build out your reputation as a high-end service provider. This will attract other leads who also understand the value of your offerings.
Another benefit of refining your customer base is the ability to reduce burnout and frustration that your team might encounter while dealing with high-maintenance, low-revenue clients.
By knowing who you want to focus on moving forward, you can also avoid adding on these more burdensome accounts as you scale up.
How to Transition from C-Level Clients
Once you’re ready to evaluate who no longer suits your organization, analyze your clients by their profitability and divide them into A, B and C levels. Then you can identify which are consistently having the most issues.
Take note of any nuances, such as if one particular property is causing the most operational strain, but is tied to a client who is profitable overall. In cases like this, you may have to accept these less-than-ideal exceptions to maintain a strong relationship.
To avoid being too aggressive, consider the revenue impact of losing these C-level clients and where you plan to make up this income.
One of the ways to gradually move away from these C-level clients is to simply inform them of changing priorities and recommend other providers who are better suited for their needs. Another option is to set revenue minimums or service requirements to retain clients. This puts the ball in the C-level client’s court to either increase their commitment or opt out on their own.
When Landscape America, based in Wrentham, Massachusetts, first implemented contract minimums, they were able to reduce their clients from 300 to 180 and increase their revenue at the same time.
As your bandwidth opens up to better serve your higher-value clients, develop initiatives to strengthen relationships with them. Continue to fine-tune your customer portfolio so you can focus on value-driven clients.
