© Ratirath | stock.adobe.com

The primary goal of any sales organization is to continually increase sales. Every customer, no matter how large or small, is important and must be properly serviced, but not all customers are equal. How do you use your sales time most efficiently? One way is by classifying customers.

In most cases, 80 percent of your sales are generated from 20 percent of your customers. To properly classify customers, the sales potential for every customer must be evaluated. Customer classification should be done every year because a customer’s volume and their potential to grow is not constant. Customers can move from one classification to another from year to year.

One common way to classify customers is breaking them into three groups: A, B and C. I prefer using descriptive names: “Focus Customers,” “Secondary Customers,” and “All Other Customers.” There are no fixed rules for breaking your customers into classifications. Choose a method that is measurable and meaningful to you.

Here are my suggestions for empowering your sales by classifying customers:

Focus Customers

1. These customers are in the group that accounts for approximately 20-30 percent of your sales volume for at least two out of the last three years.
2. You have a strong personal relationship with the decision makers.
3. They consider you a preferred vendor; therefore, most of their purchases are placed with you.
4. They consider you a friend and like working with you, or they at least have a high degree of respect for the way you handle their business.
5. They have a high regard for the manufacturer(s) you represent.

Secondary Customers

1. Customers who, after subtracting your focus customers, account for between 30 percent-60 percent of the remainder of your sales volume.
2. They might become a focus customer at some point in the future.
3. They have a high regard for the manufacturer(s) you represent.
4. They like you or at least respect you.

All Other Customers

1. This group may include a large number of customers, but they do not buy regularly.
2. You may or may not have an established relationship with the decision makers involved.
3. They are likely still getting to know you and your business.

Once customers have been properly classified, you need a strategy and plan for calling on each group.

You’ll Need a Sales Strategy

A suggested sales strategy after classifying your customers:

• Be sure the names of customers in each group, particularly the focus customers, are well known to the inside sales support team.
• Define specific parameters for each group. How quickly are general questions and responses to complaints handled? Define the target turnaround time for quotations. Determine which of these parameters is to be handled by the inside support team versus the salesperson.
• For each customer, particularly the focus customers and secondary customers, determine how and when they prefer to be contacted. Do they prefer a personal visit, telephone call, email or text?
• Customers normally buy from salespeople they trust and with whom they enjoy working. Develop long-term personal relationships.
• Use entertainment such as lunches or trip incentives as appropriate.
• Make cold calls to develop new customers when they are appropriate and as time permits.

Plan Your Contacts

A suggested plan of contacts by the salesperson:

• Periodic personal visits with focus customers are critical to establish and maintain the personal relationship you need to keep these customers loyal to you and your manufacturer(s). Maintain either a mental list or a physical/digital calendar of your scheduled personal visits.
  • On a personal visit you might discuss an upcoming sale, any problems your customer is experiencing, how you and your manufacturer can provide better service, product updates, and many other topics.
  • On each visit, learning more about each customer and giving them information about yourself is important.
• For secondary customers, personal visits of the type described above are necessary, but these are not as important as with focus customers.
• For the group of “all other customers,” appropriate periodic contact by telephone, email or text to stay in touch is normally sufficient.
• Remember to watch for both secondary and all other customers who might eventually become focus customers. Periodic personal visits with those few customers who seem to be shifting their position are important to develop or enhance a personal relationship.

Final Thoughts

Concluding thoughts on customer classification to increase sales:

• Personal time management is important.
• Stay focused.
• Keep in close contact with your inside sales support team.
• Stay positive and enjoy your customer relationships.
• Measure the progress of the focus and secondary customers using sales dollars and/or the number of quote requests.

MANA welcomes your comments on this article. Write to us at [email protected].