How Categorizing Your Customers Can Help Improve Your Business

Categorizing your potential customers business

You need customers to buy your products and/or services for any business to be able to survive or even thrive. That much is very well known. Yet many business owners have not made any attempt to categorize potential clients in terms of their desire and need to buy. Not doing so means you may be missing your best opportunities.

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Categorizing customers can be done in several ways. This particular method can be very practical as it removes our natural tendency to focus on those people we feel most comfortable with. Instead, you focus on return. You need to know how your customer feels about these five questions:

  1. Did the potential customer budget for the item/service? If the answer is no, does the person have the power to change the budget?
  2. Does the potential customer have the authority to make the decision to purchase a product or service? If not, can he or she make an introduction to the person who does?
  3. Do potential customers have a defined problem/need or are they just exploring options? You must be able to give the customer a reason to switch to your product or service.
  4. What is the potential customer’s time frame: immediate, short term or long term? Can you do anything to accelerate the potential customer’s decision to buy a product or service?
  5. What is the potential size of the sale? This question must be considered both in terms of an immediate sales and the long-term sales potential.

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Customers potential businsess buying

On each question, award the customer 0, 1, or 2 points (i.e., customer has budgeted for item, has the authority to make the purchase, knows the problem he or she needs to solve (and understands how your product will do just that), needs it now, and looks to but more in the future – this is a 10-point customer). If your customer scores 7-8 points, he or she has good potential and you need to give focused time and effort.

As the owner of the business, making these calls would greatly benefit you and you should also train your entire staff in doing the same.

You should remember that basic marketing efforts must occur before you reach this stage. Customers must be aware of your business and coming in the door. Basic marketing does that and is a building block for your screening as potential customers learn more about how you can help. They come to you with a sense of the possibilities.

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