Ideal customers have similar traits. Therefore, smart salespeople do this with their customers…
Ideal customers, those that fit your ideal customer profile, are the backbone of your revenue stream. Smart salespeople study the subtle differences and focus on acquiring the good ones and avoiding the bad ones. So, what do smart salespeople do with bad customers?
They fire them.
Yes, smart salespeople know that the time, energy and effort wasted on “net loss” customers affect their opportunity costs. They affect the relationship between scarcity and choice. Smart salespeople choose whom they will sell to.
Smart salespeople rate their customers. Next, they categorize them into three basic groups – Ideal, Acceptable and Poor. Finally, they use demographics (company size, revenue, etc.) and psychographics (interests, attitudes and opinions) to further categorize them.
Here are traits in each category to help you identify your best and worst customers:
1. Ideal Customer
An Ideal Customer meets 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. Now, these customers should be the ones who value your solution. They are the ones who buy from you repeatedly 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
An Acceptable Customer meets some of the ideal traits you’ve defined
These buyers may be smaller accounts that buy intermittently. Also, larger accounts that buy at a discount. Knowing that, these also can be good customers. However, the returns 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
A Poor Customer meets few or none of the ideal traits you’ve defined.
These buyers cost you time and money. They erode company morale. That means your resources get drained. Unfortunately, some reps see these buyers as low hanging fruit. In other words, these customers appear to be an easy sale requiring less effort. That’s 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 a discount to a break even point or worse, 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 on filtering your prospects. That way you pursue the best customers with the greatest benefit.