Not All Customers Are Alike

Author: Valerie Dennis

Not all customers are alike. And there may be some that you just don’t like. But for the purpose of today’s discussion, we’ll stick to the first statement. Given the fact that your customers are diverse, your sales structure and segmentation need to be anything but homogenous.

Customers can be profitable, unprofitable, growing, declining, high maintenance, low maintenance, strategic in value, high revenue, low revenue, etc. They can use up all your resources and give you very little to show for it. Your sales efforts will vary by customer type—with some being easy to sell, attain and retain. So why would you treat them all the same?

Sales structure is critical to sales success and it is often overlooked. Many companies don’t think twice about restructuring but don’t think about the new challenges it creates. For example, if you change a sales model from account management to a combination of business development and account management, you will not have a better performing model if you don’t evaluate the people and make the necessary changes.

Account managers don’t always make great business development reps and vice versa. Most account managers prefer to build long-term relationships, be the expert in the customer’s business and grow the business over time. Business development reps like the hunt, but not the long-term service and sales support of a customer. It is unlikely that you’ll be lucky enough to have each member of your sales team with those combined talents—although there are some who are great at both and like to do both.

Other misconceptions are that all selling is alike and the cost of the sale is the same. Customer segmentation is key here. The cost of the sale, the complexity of the sale and the customer value should be considered. Your A and B customers are your high revenue, high growth, strategic and/or high profit accounts. You will also have C and D customers—low revenue, profit and maintenance accounts—customers that might be better suited to inside sales support.  The key here is to match up the skills and cost of your sales force to the revenue and cost of the customer.

Restructure your customers first—A through D and align the sales force accordingly. In other words, put the right sales people with the right customer opportunities. Someone better suited for inside sales or small accounts will flounder in a national or key account. Sometimes, high growth customers are ignored, simply because they are growing on their own. I know, that’s counter intuitive but it happens. If the customer is selling themselves, so to speak, some reps will spend time where they can be more impactful. Not realizing that there is greater growth potential or that retention is also their responsibility.

Another thing to think about…“that one customer” who is HIGH maintenance. Uggh!! We’ve all had them–think about your high maintenance customer(s). With all due respect to the client, they are probably that way because the organization allowed it. As such, the cost to serve a customer is another consideration. Low revenue accounts (caveat: with no growth potential) should not get the same resources and support as your top accounts.

At the end of the day, when you look at your customer segmentation and sales structure, a compelling goal is to provide the right experience and value to your customers. These changes will help you optimize your selling, manage your sales costs and create the right customer experience.

 

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