I’ve written about this before, so if you are proficient at profiling your customer base, you may stop reading now and have a good day.
As my clients are coming out of the COVID recession, the really smart ones are looking at their customer base and deciding where they will invest time and energy re-building their pipelines. Focus is key to rapid recovery. Here’s a simple step by step process.
List your all of your customers by total revenue. Start with the biggest and work your way down. Now highlight those customers that generate 80% of your revenue. If you have some new customers that are growing quickly, add them to the list.
Move that list to a separate spreadsheet. Now begin asking yourself qualifying questions as to what makes those customers so desirable. Here are some good questions:
- Are they close to you geographically? Is that important?
- Are they more profitable than other customers?
- Do they always pay on time?
- Are they growing?
- Do they fit your product mix?
- Do you have a strong working relationship with them?
Think of some other questions germane to your specific business. As you answer these questions for each of your top customers, watch for some common threads that run through the list. What makes each of them special?
Now you have a profile of your best customers. As you prospect for new customers, ask these same questions of new prospects. You will want to build your pipeline with more customers like your very best customers. BEWARE. You may find that not all of your top customers meet every single criteria you have established. That’s okay, but be wary of those that meet none of them and ask yourself are you holding on to them just because they bring revenue volume, but are costing you more than they are worth?
Step Four (optional)
As you implement this qualification process you may want to add another dimension and weight your criteria with a level of importance. For example, customers that are growing are more important than being geographically close to you. Or, you are willing to accept a customer that is more demanding if they are more profitable. This “weighting” really adds another dimension to your customer profiling.