What does a good customer look like?

One of the most common mistakes sales people make is to assume that everyone is good customer.  This is definitely not the case.

In the first instance, not everyone wants to buy your product today.  They may be interested in it tomorrow but spending lots of time with them today is a waste of everyone’s time.  You need to be keeping them warm as a potential customer but constantly contacting them for a purchase is not a good tactic.  There are lots of ways of keeping them warm, such as sending them useful information or hints and tips but don’t try to sell to them.  If they are going to be a customer, they will come to you at the time that they need the product.  The skill of the sales person is to know when that is.

Even if they do want to buy your product today, they may still not be a good customer and it is important to distinguish between good and not-so-good customers.  We have a mutually beneficial relationship with our good customers and they generate lots of revenue for us.  Less good customers cost us time and money.   They are unresponsive, only ever buy the cheapest products, are overly demanding and indecisive.  You should avoid them if you can.

To determine who is a good customer, you need some criteria.  Think about what your best customer does and judge everyone else against that.  Use a points system to determine how different customers rate against each other.  This helps you to determine who to spend the most time with.  Some criteria that you might use are:

  • How much annual revenue do they generate for us?
  • How complex is their decision making process?
  • Do they pay their bills on time?

The criteria selected will vary by company and may vary by product within each company.  It is perfectly reasonable for one customer to be very happy with part of your service offering but less happy with another part.  Select all of the criteria that you believe will help you to differentiate between customers.  Decide what characteristics your best customer displays for each criteria and what characteristics your worst customer displays.  Once you have done this, decide whether all of the criteria are equally important.  If they are not, then the points awarded for the less important criteria should be less than those awarded for the most important criteria.

Having defined all the criteria and the points allocation, each customer must then be judged against the best and worst and then given points based on your scoring system.  Once you have reviewed all criteria for all customers, you can then rank them all.  Your aim should be to have all perfect customers so for those that have scored badly, consider whether you are able to do something to increase their score.  You can then divide the customers into groups, such as those to actively chase, those to keep warm and those respond to when requested.

This is not a static process and it needs to be reviewed every six months as the scoring may change or new criteria may be defined.  Customers may move up and down the ranking depending on their activity and needs, your relationship with them or because of mergers and acquisitions.