Identifying Who Your Customer Is and Isn’t (2.5-minute read)

Every business has a demographic that describes exactly who their ideal customer is. Many sales professionals and entrepreneurs fall into the trap of treating all customers equally. This is a bad idea.

Your customer is YOUR customer. They are ideally suited to do business with you. They believe what you believe, they buy what you sell and want to do business the way you do business, and they want to buy from you. 

Conversely, there are customers out there that don’t believe what you do, they buy what you sell but are unwilling to do business the way you do business, and they really don’t want to buy from you.

It’s your job as a sales professional or entrepreneur to understand what demographics matter to your business and recognize an ideal customer when you see one. It is just as important to develop the skill to identify a potential customer that is better suited for someone else.

As a strategy, I have always found that pushing customers who are a bad fit for the company I represent or own toward the competition is a very good strategy. It frees up your time and resources to focus on your customers while also giving your competition a direction away from your ideal customer.

Do yourself a favor and spend some time today and look at who your favorite customers are, the one that buys from you on a regular basis, you know the customer I’m talking about, you just love doing business with them. Make a customer profile and then search out all the customers that fit this profile and try to do business with them.

At the same time create a profile of every customer that you hate doing business with, you know who I’m talking about, your heart sinks a little whenever you get a phone call or email from them. Use that profile to identify any existing customers or prospects that you really shouldn’t be doing business with. Then create what Michael Port calls a “red velvet rope policy” and kindly ask all the customers that don’t fit into your ideal customer list to move on.

Admittedly this may seem counterproductive, scary even, but if done properly it will transform your businesses results. How do you kindly ask a customer to move on? Rarely have I ever actually fired a customer, rather I just stop calling on them and most of them move on without any further communication. The last few that keep causing you problems are notified (with a minimum of one month’s notice) that in the new quarter or calendar year they will receive a price increase and that there are new terms. You may get some push back but as long as you are kind and speak straightforwardly with the customer they typically just move on. Once a customer even apologized to me, accepted the new prices and terms and became a good customer. You just never know with people.

On the rarest occasions, I have had to fire a customer outright. It has been my experience that the best way to do this is to honestly and in person via a phone call explain to the customer that although you really appreciate their business it just isn’t working for you. It is very prudent to have prepared a list of alternate suppliers ahead of time who you feel would be a great fit for this customer. Include contact information in a follow-up email so that it is easy for the customer to move on. They don’t usually like it but really what choice do they have.

This is one of the most important strategic jobs you have. Take the time today to develop your good customer and bad customer profiles and then take the necessary steps to increase your business with the good customers and decrease your business with the bad customers. This will increase your profitability and sales and decrease the challenges your business is facing.

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Author: Jamie Irvine

My name is Jamie Irvine and I have been a Sales Professional since 1997 and an Entrepreneur since 2009.

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