Eliminate the wrong customers by defining your ideal customer profile. Increase your revenue by refocusing your sales efforts on your best customers and letting go of the bad ones.
Ever wanted to fire a customer? What did they do that caused you to want to reject their money and tell them to go away? If you’ve been in business for any length of time, you know sometimes you have to walk away from people who are willing to write you a check. As difficult as it may be, it has to be done, especially if it’s affecting your team.
To clarify, here are a few myths:
- The customer is always right. (nope)
- All customers will pay for value. (no, some couldn’t care less)
- All customers are willing to be reasonable. (no, some are downright looney)
- All customers are worth the pain. (not hardly)
When you profile your existing customers, categorize them into three sets – Ideal, Acceptable and Poor. These sets are not absolute, as some great customers buy infrequently. But, when they do buy from you, they’re wonderful to work with and you make money.
When creating an ideal customer profile, you’ll want to include demographic and psychographic information, along with buying habits and personal wants. That takes time and effort. In the meantime, here are some traits to help guide you to identifying your best customers (those to pursue) and your worst customers (those to avoid in the future).
Ideal Customer Profile – 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 one’s who value your solution, buy from you over and over again and tell others about you.
Key traits:
- 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
Acceptable Customer Profile – 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.
Key traits:
- 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
Poor Customer Profile – They meet few or none of the ideal traits you’ve defined.
These buyers cost you money and 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.
Key traits:
- Excessive demands and complaints
- Infrequent buyers
- Buy on price only
- Value is irrelevant
- Negotiate you down to break even point or you lose margin
- Slow to pay
- Expect your advisement/expertise for free
- Waste your time
Once you’ve defined your ideal customer profile, focus your sales efforts on filtering your prospect lists so that you pursue the highest probability customers with the greatest mutual benefit.