Successful salespeople know that not all customers are the same. Therefore, in order to make more sales, they do this…
Successful salespeople can differentiate between good customers and mediocre ones. They study the subtle differences and focus on looking for those who fit that “ideal” profile. What about the bad customers?
They fire them.
Yes, successful salespeople know that the time, energy and effort wasted on “net loss” customers can adversely affect their opportunity costs – the relationship between scarcity and choice. Smart salespeople choose whom they will sell to.
They profile their existing customers and categorize them into three basic groups – Ideal, Acceptable and Poor. They use demographic info (company size, revenue, etc.) and psychographic info (IAO variables – interests, attitudes and opinions) to categorize them.
Here are traits in each category to help you identify your best customers (buyer types to pursue) and your worst customers (buyer types to avoid).
1. Ideal Customer – They meet most or all of the ideal traits you’ve defined.
You highest success rate comes from selling to a fully qualified buyer that fits your ideal customer profile. These customers should be the ones who value your solution, buy from you over and over again and tell others about you.
- Buy value
- Pay premium price and on-time
- Buy consistently or exclusively
- Buy all of your products/service with upgrades
- Pay for your advisement/expertise
- Promote you to their network
- Desire partnership and value you as part of their team
- Make excellent case studies
- Provide glowing testimonials
Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.– W. Edwards Deming
2. Acceptable Customer – They meet some of the ideal traits you’ve defined
These buyers may be smaller accounts that buy intermittently or larger accounts that reduce your margins. These can be good customers, but the gains are not as strong as ideal customers that fuel your business growth.
- Buy somewhere between value and price
- Negotiate for discounts
- Buy somewhat regularly
- Want favors occasionally thrown in – free advisement/expertise
- Moderate willingness to provide testimonials
- Rarely buy all of your products or only buy standard with no upgrades
3. Poor Customer – They meet few or none of the ideal traits you’ve defined.
These buyers cost you money, time and erode company morale. They drain your team and your resources. Salespeople sometimes see these buyers as low hanging fruit. In other words, they appear to be easy sales requiring less effort. Not the case. These buyers will distract you from selling and servicing your ideal customers.
- Excessive demands and complaints
- Infrequent purchases
- Buy on price only
- Value is irrelevant
- Insist on discount to a break even point or you lose margin
- Slow to pay
- Expect your advisement/expertise for free
- Waste your time
What does your customer list look like now? Once you’ve defined your ideal customer profile, focus your sales efforts on filtering your prospects so that you pursue the highest probability customers with the greatest mutual benefit.