In almost every conversation that I have with customers, I end up talking about what a good customer looks like. This is not a question of how they look physically – we really do not care if they are male, female, black, white, short or tall. The question is essentially, will I enjoy working with them and are they more likely to buy my solution than another customer?
It is a simple fact that at any given time, only 10% of your potential customers are actively buying products related to what you do. This means that if we go looking for opportunities with the other 90%, we are probably wasting our time. It is highly unlikely that your company has sufficient sales resources to fully target every possible customer equally. It is also likely that not every company will be equally interested in your solution at the same time. As a result, you have to prioritise your work and focus on the customers that are most likely to buy your solution in the near future.
There are many further good reasons for targeting and working with good customers. We usually have a mutually beneficial relationship with our good customers and they generate lots of revenue for us. Poor customers can frequently cost us time and money and as a result, we should spend less time working with them. We may even decide not to deal with them at all if we decide that they are never likely to buy anything from us, regardless of how good our solution is. Poor customers waste our time, do not buy and are generally more trouble than they are worth.
However, all customers must be managed in some way but what you do will be different based on how likely they are to buy in the near future. All activities within the sales process must be done all of the time, although some will take more effort than others. The customers who are most likely to buy now should receive the most personal attention to move them to closure; we want to be proactive with these. The companies that are less likely to buy should be sent information, invited to technology workshops etc to build their understanding of your solution and how it might benefit them; we want to be more reactive to these companies.
Clearly, there will be a number of different factors that impact whether a customer is a good one or not and some will be more important than others. We need to identify the characteristics of a company that imply that they will be good for us to work with and that they will want to buy our product.
Consider geography and order size. A customer who is close to your office / factory is easier to service than one who is based tens of miles away, which in turn is better than one based hundreds of miles away. The closer a customer is, the easier it is to meet with them, deliver to them and work with then in whatever way that you have to. As a result, a customer who is based closer to you is better than a customer who is based further away.
The size of an average order is also a factor in determining a good customer. A customer who makes large orders is better than one who makes small orders; a customer who makes lots of orders is better than one who makes only a few orders. However, which is better, a customer who makes lots of small orders or one who makes a few large orders? Which is better, a customer who works nearby who makes a few orders or a customer further away who makes lots of orders?
You need to adopt a systematic approach to defining a good customer. If you are interested to know more, please get in touch.