A temptation of new, and probably some seasoned entrepreneurs, is to try and win clients at all costs. The notion that a large client base is the measure of success is misguided and a little dangerous. It is certainly a situation I have found myself in before as I learned the ropes of running my own online business.
I remember the early days of running VE People where I found myself caught in a bit of a cycle whereby I would often try and land a client at all costs. This would even involve running some jobs at a loss with a view of recouping those losses from future engagements with the client. It was a strategy that did not work.
Aside from being financially irresponsible, the major impacts were actually felt throughout my entire company – not just on the bottom line. Here I am sharing with you the challenges I faced as I started VE People some five years ago.
What did my focus on winning clients at all costs mean for VE People?
- I attracted the wrong clients – cheap offers and swimming in the low end of the pool meant that my sales and delivery staff were often dealing with aggressive and predatory clients. The focus was rarely on mutual benefit and project scopes tended to change and be pushed to their limits. We had several clients who used the threat of posting negative feedback and reviews online despite us completing our end of the deal. We attracted some clients with extortionist behaviour and it took a tremendous toll on our teams and me.
- Our quality suffered – we pride ourselves on our quality but creating offers that were based on low cost only created an environment where we were locked into delivering some solutions that did not meet our quality standards. Sometimes we would make the call to uplift at our own expense, other times we could only present our clients with solutions we were a little embarrassed of.
- Team morale was low – a mix of the wrong clients, tight deadlines and a lack of freedom to creatively work created an environment of stress for the team. This led to a lack of referrals for other potential staff to join us and in some cases we hired people who we should not have.
- We started to miss – Through operational stress, our focus shifted onto things it should not have at the expense of key activities. I spent more time fighting fires and sorting out operational problems than I did managing core aspects of the business. A prime example of this was the lack of focus on my end that allowed my accountant to not perform his duties correctly, resulting in significant financial strain for VE People and me personally.
You can see how a simple choice in terms of a client acquisition strategy had a negative impact across my business.
However, through a great deal of grit and resilience, this was a fantastic learning exercise and I have used it to form a critical part of my company strategy ever since.
Put simply, as a business owner, it is your responsibility to create the right engagements with your clients.
What does this mean for me?
It means that as a business owner who employs a reasonable number of staff, the overall health of the organisation and my ability to support the people who work for me is my responsibility to manage. The outcomes I must focus on are:
- Delivery of outcomes that are sustainable and of a high quality. Longevity for my staff in terms of employment and a positive working environment must be optimised.
- Pricing must be commensurate to the level of quality and skill provided complemented by the location of work execution and method of service delivery. Flexible pricing and delivery will support the right clients we engage with.
- We must work with clients who share our values and who are committed to mutually beneficial outcomes.
A focus on the above creates a sustainable organisation that can scale and grow as required, with the right processes in place and right tools to make things easier to manage work performance such as the Time Doctor.
As a general principle, creating the right client engagements will be a foundation of a sustainable and successful enterprise. It is ok to no say to prospective clients who do not share an interest in the well–being of your company, who do not share your values or who do not fall within the bounds of acceptable engagement. There is no need to be rude, but a polite declination will also beat a poorly delivered project or a big gaping hole in your pocket at the end of the day. Prioritise the well-being of your staff first, provide them with great clients to work with and set a vision that allows people to lift their performance and stretch their personal boundaries and you will be well on the way to creating something special.