3 Painless Strategies to Identify Your Ideal Customer

Portrait of business colleagues holding each other and smilingTake this easy test to see if you’re selling to the right customers.

The phone rings, you look at the call ID and it’s customer “X” you:

  1. Genuinely smile, pick up the phone and say something like “Hi Gary, how great to hear from you!”  (the key word here is genuinely)
  2. Look at the caller ID, get a sinking feeling in your stomach and think “$&!*”  What do they want now?!
  3. Run out of your office and pretend the phone didn’t ring.

If you answered anything other than “1” then you’re showing symptoms of the “Pain-in-the-Neck Customer Syndrome.”  Not to worry.  It’s a common ailment among all sizes of businesses.  It’s often caused by the insatiable need to have certain customers on your customer list.  But once they land there, you discover that they have “needs.”  These needs are resource heavy, they take up everyone’s time and to top it off, they are forever complaining about your prices and threatening to move to the competition.   This whole relationship just isn’t want you thought it was going to be.

Right about now, I bet your little voice is saying something like “But, you don’t understand, I NEED these customers!  They buy stuff and that’s revenue.  Since when was revenue a bad thing?”

When you take on customers that cause your people to run around doing extra things that weren’t originally designed into the process – this is costing you money.  The unfortunate thing is that it’s often invisible in the accounting.  Instead, it often shows up in the form of the quiz I used to start this article.

Here are three painless ways to identify your ideal customers:

  1. Look through your customer list and simply start marking the customers you like working with.  Don’t think too hard about it, just use your gut.  Now head down to accounting and ask them to run a report which sorts your customers in descending order of sales based on 1)margin 2) revenue.  Just for kicks get that report over the last three years.  Now compare the list you created to the margin report.  Pick and choose the customers with the highest margins that you like to work with.  Now start profiling them.  What do they have in common?
  2. Create a list of ideal client behaviors and qualifications (based on the work you did above).   Make sure you also understand what it is about this list that makes it ideal.  For example,  Does the client have less than 5 locations in the region?  (Yes/No) Our ideal client has less than 5 locations in a 150 mile radius.  This allows is to service them within 24 hours.
  3. Include “ideal client characteristics” as part of your segmentation and customer satisfaction feedback process.  Once you’ve decided on your ideal customer characteristics you have to be sure that your customer satisfaction process measures your ability to deliver.  Once you’ve committed to an ideal customer, you have to have stellar performance.  Measure it and act on the results.

Don’t look at this process as turning customers away, instead look at it as freeing up space for more ideal customers.  These ideal customers are easy to work with, they value what you offer in exactly the way it was designed.  They are loyal.  They don’t complain about price and that makes them profitable.  Why wouldn’t you want more of that?