What is a good customer? In the business world, aren’t all customers “good customers”? That’s not always the case. If your business is in survival mode, you need customers desperately and will take anything you can get. If you’re in a more stable position it is important to partner with ideal customers, and have a means to measure the success of each relationship.
A strong relationship begins with the values of each organization. When the core values of organizations align, doing business together is enjoyable and mutually beneficial. Additionally, companies should have their ideal customer profile defined. It will vary by industry but things to consider are size, access to decision makers, industry, location, volume, internal processes, and positioning within the market.
Having performance measurements in place is essential. Here are some questions your sales leaders should be asking themselves if they haven’t already and seek the answers.
- How much does it cost to acquire a new customer?
- How long until that customer becomes profitable?
- What is your average annual value of a new customer?
- How many new customers do you need to hit your growth goals?
- What is your average annual attrition rate of customers?
- Who are your best and/or most profitable customers? Are there any trends?
Asking these questions to members of your sales team will help to define the ideal customer profile and set the sales direction and strategy for your organization.