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Identifying Customers

Identifying Customers

Mapping customers to appropriate priority levels drives efficiency and raises performance

Nick Fawbert

If you’ve followed the series so far, we’ve discussed about how you can get in the right mindset for sales, what the sales process involves, and how to set yourself targets to measure yourself against.

At this stage we need to think about which customers you are going to target, and in what order. For the sake of the exercise we’re going to call it prioritisation, but if you have a marketing department or are familiar with that process, we can call it segmentation.

It boils down to creating personal customer categories.

Take Advantage of Segmentation

In larger organisations, correctly identifying and categorising our customers is a key responsibility of senior sales management in association with the research facility provided by the marketing department. If you’re an entrepreneur or a one man band, you’re going to need to do this yourself.

Before potential clients are distributed to the target categories, the markets are segmented and analysed for their intention, commitment and capacity to invest with us.

Typically, the total number of clients and their total potential spend are all aggregated to create individual portfolios that are balanced in their potential to generate revenue for your company.

We do this for the simple reason that if we don’t do it, we are likely to default to doing what is easiest to do, not what is likely to be most successful. With 7 billion people in the world, the chances of getting this wrong are very high, and the cost of doing it wrong can be wasted effort and a failing business.

Simple Customer Scoring

A simple way of doing this may be to score each potential client against how much they spend in your sector vs how much they spend on competitive services.

For example, a seller of x-ray equipment may include all hospitals in the ‘sector’ range but only those hospitals that have an x-ray department in the ‘services’ range.

Or a BMW dealer may categorise all car buyers in the ‘sector’ range but only those people who buy mid-range luxury cars in the ‘services’ range.

Clearly all customers who operate in your target sector may be potential customers of yours, but those who spend both highly in both your sector and your services are far more attractive prospects. We need to focus on them first.

Tailoring to Meet Your Industry

As many of our customers are companies selling marketing solutions to major brands and advertising agencies, let’s take that as an example.

Typical segments include: International advertising agency groups, international and large regional brands segmented by business category (e.g. travel or finance), local specialist agencies and local brands and customers segmented by postal district

Any individual may have some or all of those segments in their target customers.

Once your portfolio is created it becomes your task to prioritise and manage your relationships to gain maximum revenue.

In simple terms you can prioritise your portfolio by listing the clients, and mapping them to a matrix.

Let’s look at how this works for the online marketing companies, with companies spending large amounts on marketing services in general on one axis, and companies investing large amounts in online marketing services on the other.

Customer Mapping

Each client is mapped onto this graph according to their current expenditure, and it gives us four very clear quadrants, A,B,C and D to work against.

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In this example Group A already spend a lot on marketing in general and a lot on online services in particular.

These are priority clients, they represent the biggest opportunity to earn revenue. They require close client servicing, attention to their immediate needs and concerns, and regular face to face contact to sustain the relationship.

With high offline spend they also have plenty of margin for growth. They probably represent 20% of the total clients, but 70% of the revenue.

Group B are equally attractive. Although not big spenders in marketing generally, they commit a large proportion of their spend to digital channels.

These clients offer great ‘low-hanging fruit’. However, whilst high spenders represent a good opportunity for revenue today, there may be restrictions on growth from the lack of opportunity to draw expenditure from other media

They probably represent 10% of the total clients, but 20% of the revenue

Group C needs some attention, with lots of investment in marketing, but limited digital spends.

These clients are a big growth opportunity, however they can be a big drain on sales resource as they may require a large investment of time and energy just to persuade them to use digital media, let alone buy the company’s products. The sales team need to invest time wisely in this group to maximise return on investment.

They probably represent 10% of the total clients, and only 5% of the revenue

Group D are ‘holding clients’, with limited current spend.

These clients are worth keeping an intermittent eye on, as at some point they may grow and flourish, moving into one of the more lucrative client segments

They probably represent 60% of the clients, and only 5% of the revenue.

So we can see that we’ve created a prioritisation list of key clients to focus on as part of our sales effort, and a very clear idea of where our first calls should be made.

Getting Started

Have a look at your own client list based on the same approach, but with axes that reflect your business.

Don’t worry about getting this wrong, it’s only for your use, and you can soon move clients to a different segment when more information becomes available.

Holding this list close to our heart, we can discuss how we can first break the ice and start to get business rolling and drive all those numbers up!

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Nick Fawbert

Nick FawbertNick Fawbert

With 25 years in the media and marketing industry, and almost 20 of those in digital marketing, Nick is one of the most experienced practitioners in the Asia marketing industry. He is currently Founder and CEO of Mutiny Consulting.

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