Categorize Your Customers

Not all customers are created equal. Are you matching your level of service to their value to you?

By Bill Lee

How many outside salespeople reading this article allow the Paretto Principle to determine how you allocate your selling time? If you’re not sure, perhaps you know the Paretto Principle by another name—the 80/20 rule.

All customers deserve to be treated fairly and ethically, but all customers don’t merit the same amount of your time. So by categorizing them, it’s a lot easier to determine how and where to concentrate your selling time.

Let’s begin with listing your prospective customers as a target category. Not all builders in your trade area are viable prospects. Some of them are not creditworthy. Some are simply too small to justify the time it takes to cultivate into full-blown customers. Some need to be pruned like deadwood.

From Prospect to Customer

Before the prospect makes an initial purchase, you’re on the outside looking in. Your goal at this point is to earn the right just to quote the prospect. Without the prospect’s trust and confidence, you are highly unlikely to get an initial order, regardless of the competitiveness of your pricing.

But just as soon as you do earn your first order from a prospect, your strategies and tactics must change. Just don’t make the mistake of believing that your incredible sales skills have eliminated the competition. Just the opposite may be the case. The builder may be merely using you to get your competitor’s attention.

However, once a prospect does make an initial purchase, he or she must be moved into a different category—the New Customer Development Group. While the Development Group is “on the books,” they most likely retain quite a bit of loyalty to the competition. But you do have your foot in the door, which is an essential first step.

Royal Service Sells Consider the following sales tactics to move them to the next group:

1. Explain to the yard foreman that this is a new customer. Ask him to make sure that he goes the extra mile to ensure that there are no backorders and that he makes certain that the company lives up to its delivery commitments. 2. Coordinate with your dispatcher or yard foreman the timing of the initial delivery so you can arrange your schedule to arrive on the job site at the same time the driver makes the initial delivery. Wow! This is really impressive. It shows the new customer that you’re not taking lightly the opportunity he has given you. I recall one salesperson who actually accompanied the driver to make the first delivery to let the customer know how much he appreciated the opportunity to serve him and how committed he was to excellence.

3. Especially during the first month or two of the new relationship, take time to personally go over each of your new customer’s invoices. You might gain extra mileage if you attach a Post-It Note to the statement, communicating that you have reviewed all invoices for accuracy.

Once the customer begins to purchase from you routinely, it’s time to move him or her into a new category—Established Customer. These are the customers who have learned to trust not only you, but your company, as well, to take care of their product and service needs. You have proven yourself, so now you are an “insider.”

Coddle That Core Customer

This is when the 80/20 rule comes into play. Among your list of Established Customers you’ll find a group of Core Customers. This group will make up the majority of your sales and therefore deserve the lion’s share of your attention.

Customers can earn Core Customer status only if they have first become Established Customers. So to get the most mileage out of your selling time, work customers according to their category.

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