From: alexhormozi
A common issue in business is having too many diverse customers who demand different things, leading to promises of varied outcomes that become difficult to deliver 03:22:0. The ability to sell effectively, particularly to the right people while declining the wrong ones, is crucial for business growth and profitability 03:36:31. By focusing on target audiences, businesses can achieve greater success 03:36:41.
Selecting the Right Avatar
Choosing the correct avatar is considered one of the biggest leverage points in business 03:14:09. This involves strategically deciding which customers to serve and, importantly, which to say “no” to 03:18:16.
Benefits of Focusing on Ideal Clients
Businesses that work with higher-quality prospects often benefit from:
- Higher Payments 03:14:24
- Lower Maintenance due to existing skills 03:14:27
- Productized Delivery: Niching down allows for standardized delivery, unlike generic consulting 03:10:31.
- Consistent Outcomes: A niche business can deliver consistent results, for example, providing specific ads, landing pages, sales training, and even meal plans, all productized for clients 03:10:36.
Examples of Avatar Selection
- Hair Salon Business: A hair stylist had two offers: an extension technique (24:1 LTV to CAC) and business coaching (11:1 LTV to CAC). Despite the hair extension teaching not being a business offer, it had a massive market and higher arbitrage. The advice was to focus on this single front-end offer and then cross-sell the business coaching 03:14:38.
- Tile Business: A tile business sold to homeowners, interior designers, and home builders. Home builders cared primarily about price, while interior designers consistently brought in new customers. The business decided to focus solely on interior designers, making their lives “amazing” and stopping sales to the other two segments 03:16:17.
Saying “No” to Money
A crucial, yet difficult, aspect of client selection is the discipline to say “no” to money from non-ideal clients 03:19:20. This strategic decision can feel like a “sting,” but it allows a business to focus on its most valuable segments 03:22:0.
Power of "No"
Strategies for Refining Your Client Base
- Evaluate Current Clients: Review existing clients to understand who you can help the most 03:16:07.
- Sunset Non-Ideal Clients: If a segment is not aligned with the business’s strategic focus, it might be necessary to phase them out, even offering refunds if they were on a “lifetime deal” 03:19:58. This might involve a “hard conversation” but maintains integrity 03:19:39.
- Leverage Existing Content: Content initially created for a broader audience can be given away for free to help non-ideal clients self-qualify, directing them to the business’s core offerings only when they meet the desired criteria 03:18:47.
- Focus on Outcome: While community is important for retention, clients initially buy based on the promised outcome. The offer should highlight the desired results to attract the right people, and then the community fosters their long-term engagement 03:23:11.