Recently, I had a conversation with a business owner who was keen to make some changes to his business. These changes involved the sales mix of his service offerings and focusing more aggressively on a specific subset of his current customers. He realized that his true passion was for providing one of his current services to a very particular group of his current customers. This focus also had the bonus of being a much better tool to improve his financial results in addition to aligning more closely with his dream lifestyle.
The problem was that if he simply “got rid of” all those customers who didn’t fit his newfound target, he would face a short-term reduction in sales and cash flow. His passion for this particular target segment would eventually generate financial results that would eclipse what he had been creating with his current customers. But the time lag between now and that point in the future would drain cash from his bank account.
Having realized that he wasn’t able to comfortably sustain the temporary reduction in cash flow he became predictably frustrated. He expressed that he felt he would probably never be able to create his dream business. He felt he missed his chance because he should have done it “the right way” when he first started out. He felt that he had “built a monster” that he could no longer control.
Most business owners can relate that situation and those natural feelings of frustration. But those feelings are completely unwarranted if you understand how to overcome fear via a path to bridging the chasm that seems too wide to cross. The keys to bridging that chasm are to follow a proven series of steps that make it crystal clear what you need to do and how to do it, without suffering a reduction in financial results. Below are the steps to follow.
8 Steps to Overcome Fear
Calculate how much profit you would make from this target combination of product/service and customer segment. Then calculate how much you anticipate making from a single unit (target product/service and target customer segment combined make one unit).
Calculate how much profit you are making right now from all the other combinations of product/service and customer segments that do not fall into your new target. Then calculate how much profit you earn, on average, from one of these units.
Divide the profit you calculated in step 1 by the profit calculated in step 2.
This is the number of “old customers” (from the non-ideal product/service and customer universe you looked at in step 2) you can get rid of every time you acquire one of your new target customer units from Step 1.
Start working hard to attract your new target customers.
Have the intestinal fortitude to jettison the number of “non-ideal” customers from step 4 every time you acquire one of your new target customer units.
Determine your target date to have this transition completed and back-calculate the rate you must acquire new target profile customers in order to achieve your goal.
You now have concrete targets for acquiring these ideal customer units that you can use to establish your goals and targets for lead generation and conversion.
The result of this approach is a set of clearly defined targets that will allow you to migrate toward the ideal outcome you identified, a clear timeline for accomplishing it and certainty that you are moving toward your ultimate goal as you hit the intermediate targets along the way.
You will accomplish all these things with no reduction in your current financial results and with the confidence to release those non-ideal customers according to your plan. Ultimately, you can overcome fear and achieve your target that may have initially seemed impossible.
You will be able to do it with a clear plan, minimal risk and no reduction in your financial results.
Scared Businessman Photo via Shutterstock
love the picture… lol
Great solid and actionable advice, Steve. It’s important that we can face our fears so that we can take our business and our lives to the next level. Thanks for sharing your tips/insights with us.
Thanks Ti! I agree – facing down our fears is one of the key liberators for moving our lives (and our businesses along with them) forward.
Mark @ ThinkTraffic
Great post Steve.
I recently went through this with my own business. We have recently decided to start specializing in SEO for e-commerce businesses since this is where our real expertise lies. But it’s scary to turn your back on a portion of your potential market.
I know that by taking this route we will have a better business (and happier customers) in the long run, but it’s a scary step to take.