Categorizing your customers as detailed below will help you focus on those customers who love you, use you, recommend you, and will happily pay top whack for your services.
First of all you must categorize all your customers into A, B, C, or D grade customers.
A Customers – these are your very best customers, the ones who use you time and again, are rarely a problem, recommend you a lot, and are a real pleasure to work for.
B Customers – these are still good customers, but not quite as good as the A grade customers. These customers do use you, but rarely give you any referrals, may complain sometimes and are not as loyal to your company as A grade customers are.
C Customers – These customers are just OK! They rarely use you, are quite likely to complain, hardly ever refer you, complain about the price, and are sometimes a pain in the butt.
D Customers – remember this – D is for Ditch. Keep these people on your contact database just so you know that if they call you, you have to make your excuses and not re-engage with them! Even better, send them to your competition who “may be able to help them better than you can.”
When I categorized my customers into those groups in 2006, it made a huge amount of difference to my business, as I spent more time loving and appreciating the A and B grade customers, less time courting the C’s, and I wasted no time at all on the D grade customers. This meant I was spending most of my time and effort on the people who were most likely to use me and refer me! Doesn’t that make a lot more sense?
Some people argue with this system because it places people into boxes depending on their desirability. Their argument is that even a D grade customer may refer you to an A grade customer but this rarely, if ever, happens for a number of reasons:
People generally know and socialise with others in their own social class so if they did refer you it would likely be to others in the same D category type as they are. Birds of a feather really do flock together.
If your D grade customers were the type of person to refer you to quality people, would they be D grade customer in the first place?
Why categorise your customers like this?
You need to know who your best customers are so you can work out who you need to spend most time and money focusing on, and also to try and move your B & C grade customers up one level (at least.)
One of the best things I ever did was to ditch my D grade customers! I even ditched one guy who gave me many thousands of pounds every year, but that chap was getting a real bargain with me despite his huge spend, and he often complained, often moved goal posts, would demand a lot of extra additional services for little or no extra pay and regularly changed dates and times, and was basically a pain in the butt to deal with.
Interestingly enough a couple of years later after he had tried and had bad experiences with other companies he came back to me on my terms.
By ditching your D grade customers you will have much more time to focus on your A and B customers, and also to think about ways you could move your B and C customers up a level. You will also be able to spend that time working on gaining new A & B grade customers.
How can you move your B and C customers up a level??
- Better communications
- Newsletters
- By doing that little bit extra when you see them
- Offers and give-aways
- Offer free products
- Offer free solutions
- Offer free 7 day no quibble return to site warranty
- Follow up letters (The “Thank You After Work Done” letter!)
Many business owners just focus on getting new customers, and yes, of course, new customers really are important, but if you have a database of even just two or three hundred customers that have used you and loved you, aren’t they a great place to start when you want some more profits now?