Platt Perspective on Business and Technology

Building a client base – part 1: identifying potential clients and your intended marketplace

Posted in startups, strategy and planning by Timothy Platt on July 17, 2010

I recently received an email from a colleague who is looking to build a home-based business. More specifically, Ned wrote:

• “Where may I find some pointers on how to create a work from home software development business? Specifically, how does one create a client base?”

I told him that I am going to post to my blog in response, and this posting is the first installment in that series. My goal here, is to identify and address issues that would come up in developing an organized client base and market share for any small or home business, and in that I recommend that anyone looking into doing this, start by reviewing my soon to finish series on building an online store, as much of what I wrote there would apply to the smaller startup or home business as well. (See Startups and Early Stage Businesses, postings 20 through 33 for installments in that series posted up to now.)

I want to start this series with the basics, and would propose a checklist of core questions that anyone seeking to develop a client base should be asking.

• Precisely what products and services will I be offering? This is actually something of a trick question, as the answer you need here has to address this issue from the perspective of the potential client and their needs and priorities. So if you offer some particular form of software, your answer here should be couched in terms of how the client would use it and view it as a necessary purchase.
• Who would want the products and services enough to seek them out and purchase them from my business? This is a question that comes down to identifying targeted marketplace demographics, but it is one that would more effectively begin with a case study analysis. What precisely would your products or services offer and how would a potential client use them and in ways that would capitalize on their capacity to offer a unique value proposition for them? Now who would seek out this unique value proposition, identified here by demographic level qualifiers?
• What would your price point be for your products and services?
• Would your business be primarily local or be built with other identifiable constraints? What are they and how would they shape your target demographics?
• How big a client base do you need at any one time, and how active would your good customers have to be as customers to meet your business goals?
• Are you looking primarily for one time customers or to develop repeat business with steady customers?
• How much customer support would you offer and is ongoing servicing and customer support a core part of your business plan? If not, is it at least a planned-for component, even if it is simply as a contingency situation?

These and related questions are not the types of checklist questions you would simply run through once and in some set order then set aside. The goal here is to go back and forth between them to assemble a coherent model of your necessary and ideal client bases. And this model would inform and help shape your business plan and your answers would also help you begin to bring into focus the types of customer data you would need to capture in a client database, and both to keep track of who your clients are and to stay engaged with them, and for providing effective customer relationship management (CRM) services.

As a hands-on exercise, review the questions I posed above, and look for and identify gaps that they do not cover, but that would be important for you and your business. Now go through at least two rounds of answering them, with the first round simply answering them in order, and the next reviewing and adjusting your individual-question’s answers to take into account your answers to the other questions. I will add that this will both help you avoid the trap of inconsistency and seeking to reach what may in fact be mutually exclusive goals, and this can also help you identify those gaps that would call for specific additional questions, in bringing your marketplace and your ideal client base into focus.

And as a final thought for this posting, your ideal description of a potential client would be framed in terms of how you would meet their needs. Perform this analysis while thinking as if you were on the other side of that sales counter and in terms of the customer you wish to identify, reach out to and sell to.

The next posting in this series is going to pick up where this leaves off and look into the issues of connecting to potential customers and developing relationships with them.

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