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Don’t Manage All Customers the Same Way By Bill Lee


How many 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 customers 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.

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 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 prospect may be merely using you as a vehicle 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 New Customer 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.

Consider the following sales tactics to move them to the next group:

1. Explain to your shipping personnel that this is a new customer. Ask them to make sure that they goes the extra mile to ensure that there are no backorders and that they make certain that the company lives up to its delivery commitments.

2. Coordinate with your dispatcher or operations personnel the timing of the initial delivery so you can arrange your schedule to arrive on 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 that 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 on a routine basis, it’s time to move him or her into a new category, that of 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.”

This 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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Bill Lee is author of Gross Margin: 26 Factors Affecting Your Bottom Line ($29.95) and 30 Ways Managers Shoot Themselves in the Foot ($21.95) plus $6 S&H for the first book and $1 for each book thereafter. Visit BillLeeOnLine.com