Navigating the Customer Forest

UNDERSTANDING YOUR CUSTOMER BASE is an essential component in the success of any business. Having a clear picture of who your customers are can better tailor your products, services, and marketing efforts to meet their needs and preferences.

It goes much deeper than this obvious positioning. The structure of your customer base has an enormous impact on the level of activity, resource allocation, and impact on labor. Without clarity on who you’re doing business with, you’ll find yourself busy being busy with little or no profit at the end of the month.

A helpful way to visualize your customer base is by using the analogy of a forest, where different types of customers are represented by different trees of differing size. Each tree has its own unique characteristics, growth patterns, and risks.

The Forest: The Overall Customer Landscape

Imagine your customer base as a diverse forest, with different trees symbolizing various customer types, such as schools, events, corporations, or causes. Each tree species has its own unique needs and seasonal changes.

The forest is made up of bushes, brush, saplings, and trees. There are young trees, vigorously growing. There are mature trees, with a solid trunk and full, lush foliage. Finally, there are the old growth trees that are aging and prone to disease and insects. Compare this to each of your customers. What categories do they fit into?

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The size of each tree represents the market potential for that particular customer type. Some trees may tower over others, indicating a larger market share or growth opportunity.

The bushes, brush, and saplings are the young companies trying to establish themselves. They are at most risk of surviving. They are competing with the more mature trees for resources. As a customer, these are the start-ups.

To maintain a healthy business, it’s necessary to balance the ecosystem of your customer forest. This means nurturing relationships with different customer types and not relying too heavily on any one group.

As I work with dozens of businesses of all sizes, one key factor comes into play over and over. The size of the customers a company engages with is in direct proportion to the size of the vendor.

It’s very common to see a million-dollar company spending tons of time and effort on small bushes or just leaves. It’s less common — but equally risky — for a small company to be tending a towering giant of a customer, with limited resources to provide to them.

The Trees: Identifying Your Customer Types

Deciduous trees, which shed their leaves annually, represent seasonal businesses. These customers may have a strong presence during specific times of the year but require special attention during off-seasons.

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Evergreen trees represent consistent flow clients providing a steady business throughout the year. Nurturing these long-term relationships fosters a stable, recurring revenue stream. Be careful to consider the size of the leaves (individual orders) with the evergreen client.

Each customer type has its own unique characteristics. Examples include purchasing habits, communication preferences, and loyalty patterns. Categorizing these nuances will help you better serve each group as well as raise awareness to the stability of each customer relationship.

Strengthening Individual Customer Relationships

The branches of each tree represent individual customer relationships. Robust, healthy branches symbolize strong, loyal customers who consistently engage with your business.
Weak or damaged branches may represent at-risk customers who require extra attention and care. Identifying warning signs early can help you re-engage these customers and prevent them from falling off.

It will be necessary to prune dead branches, representing customers who have moved on or no longer perform within your terms of service. Knowing when to let go will help you focus resources on the most promising relationships. This often is a case of misalignment of expectations and values.

Maximizing Individual Transactions

Each leaf on a tree represents a single transaction or interaction with a customer. The more leaves a tree has, the more transactions it generates. Consider the type and size of the leaves. Broad leaf vs. needles. Big seasonal orders vs. evergreen small orders.

Encouraging new leaf growth involves upselling and cross-selling to existing customers. Focus on broad leaf vs. needle growth. Offering complementary products or services can increase the value of each transaction. Visualize what’s necessary to grow the tree over time. What fertilizer are you using?

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Ensuring leaf health means providing positive customer experiences to encourage repeat business and positive word-of-mouth. This comes down to consistent customer attention, not the typical random contact that only occurs when the customer has an order to place.

When leaves fall, it’s an opportunity to learn from lost transactions and identify areas for improvement in your customer service or product offerings.

Tending Your Customer Forest

Just like a real forest, your customer base requires regular maintenance and analysis. This involves monitoring customer satisfaction, tracking sales data, and identifying areas for growth. Look for patterns within the healthy customers as well as differences in those PITA customers.

As market conditions change, adapt your strategies to better serve your customers. Examples today include digital workflows, DTG, and DTF. This will involve introducing new products, adjusting your pricing, exploring new communication channels, and understanding changing value-based offerings.

Planting new seeds represents acquiring new customers. This is a necessary part of replacing customers who have fallen off for whatever reasons. It will involve targeted marketing campaigns, referral programs, or partnerships with complementary businesses.

Celebrating growth and success is motivation and drives customer momentum. Regularly acknowledge milestones, customer loyalty, and team achievements.

Conclusion

The forest analogy provides a helpful framework for understanding and managing your customer base. By viewing customers as a diverse ecosystem of trees, branches, and leaves, you’ll develop targeted strategies for growth and success.

Taking a holistic approach to customer management involves nurturing relationships, adapting to change, and continuously seeking opportunities for growth.
Tending to your own customer forest with care and attention will cultivate a thriving, sustainable business that stands tall and is sustainable in the marketplace.