Every business has customers, clients or patients; they are the life blood of a business and the reason a business exists. Often we see successful businesses that have been around a while have a tendency to become complacent and take customers for granted. They have a steady dollar flow of business they’ve built up over the years so they lose interest or stop paying attention to shifting buying patterns, volumes and profitably.
We live in a world that is constantly changing so keeping your finger on the pulse of your customers ensures you understand their changing needs, wants and demands. The key to staying current and unlocking your full customer potential is through periodic customer analysis. Here are three areas to look at:
Who are Your Best (or Worst) Customers?
In the minds of most business owners this is simple, their best customers are the ones who buy the most! On the surface this statement is true however there is more to measuring the quality, not just quantity, of a customer. How they buy (bulk or one at a time with lots of returns), when they buy (spur of the moment rushing or planning ahead), how profitable (willing to pay a fair price or cherry pick) and how they pay (on time or have to chase) all should be considered in determining customer quality.
Consider creating a spreadsheet and applying a ranking (1 to 10) to each of these areas. Once you have the rankings, communicate with your customers if you see problems, and let them know you value their business and want to take steps to strengthen your relationship.
What are they buying?
This is a straight forward process of gathering and analyzing data on what each customer is buying. Is there a seasonal pattern or do they only purchase certain lines or categories. Knowing their industry helps understand your customer and gives more insight into how your product or service fits in their supply chain. Add this information it to the spreadsheet created above so you have a complete customer profile.
Will they buy more?
It’s common knowledge that it’s easier to sell more to an existing customer than find a new customer. Upselling related products or services is an obvious approach but more can be done. The key to more is determining where and how you fit into your customers buying framework. By framework I mean how your company is positioned in the mind of the purchaser. Are you a major or minor player? Are you a single source or one of many options available? Is your product used in production or assemble or for operational consumption?
Consider mapping out the “buyer’s decision making framework”. What are the steps that lead your customer to purchasing with you? If you’re a major supplier to their production how can you better position yourself to servicing their needs? Maybe assign an in-house customer rep or schedule quarterly planning meetings. With a little thought you can make your customer/vendor relationship stronger by analyzing where you fit in their buying framework.
Finding, retaining and servicing customers is a never ending process, and is key to both business growth and survival. Don’t become complacent in evaluating the quality of your customers and address their every changing needs. Through thoughtful analysis and execution, you can strengthen and improve the relationship with your current customers. Always stay in touch and be prepared for customer change!
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