Growing the Top Line

CHAPTER 2Which CUSTOMERS Will I Serve?

We talked about the value of a customer as the source of all revenue in Chapter 1. What we didn’t talk about is how important choosing wisely is. Whom you choose to sell to is the single most critical question a company must answer. The amount of time and energy that goes into customer acquisition is staggering, and for good reason. It is a much more efficient, less risky proposition to sell to an existing customer than it is to sell to a new customer. But new customers are generally aligned with growth for a new business. What percentage of your time and energy should be focused on existing versus new customers?

As you ponder this, let’s make it real. There are only 24 hours in a day. There are only so many employees you can lean on. There are only so many dollars you can spend. As an entrepreneur, this is an intuitive set of data. Your gut tells you what you can and cannot support. At a larger enterprise, it’s a more formal budgeting process. But in either model, you need to think about where to focus your limited resources.

Older companies tend to have more customers to serve, and care and feeding of those customers becomes the primary objective of the revenue engine. David Maister, former Harvard Business School professor, consultant, and best selling author, coined the phrase, “hunters and farmers.” Older companies, with more mature processes and client relationships tend to “farm,” meaning they rely on existing customers, while younger ...