Aug 18 2007
Segment your Clients to Improve Sales
Client segmentation can be an important marketing tool and sales practice management technique to help increase your marketing efficiency and improve your sales. Traditional sales roles, such as the brokerage or insurance industries, have been using market segmentation techniques for years, but it can be used effectively in any business. Client segmentation is the practice of dividing customers or prospects into groups that are similar in specific ways relevant to marketing, such as age, gender, interests, geography, school, industry, spending habits, and so on.
For this exercise, I want to focus on top clients. Therefore, your criteria for grading client segmentation are on the basis of profitability. What is the total revenue generated for each client? How much time is invested in each transaction (is less is better)? How important is this client to my business (referrals/relationships)? These questions are the more important criteria, but I also like to ask the question do I enjoy working with this client?
The most often used term for a top client is “A list”. In most sales circuits this is known as the “A Book” although there are other less used terms such as “gold” or “diamond”. This segment may be broken down into four groups labeled A, B, C, and D. These percentages are guidelines, but they usually fall out something like this:
• “A”: top clients 20%
• “B”: good clients 40%
• “C”: potential 35%
• “D”: not worth it 5%
Once you have completed this exercise, I suggest that you “tag” these clients so that you can easily filter client lists in the future. Any CRM (Customer Relationship Management) software should have this function. Microsoft Outlook Business Contact Manager has a field called “account rating”, but this can also easily done in an Excel format with a few columns and simply sort your columns.
Once you have identified your “A list” it is time to get your marketing campaign ready for action. It can be as simple as a “thank you” telephone call or more elaborate like a client appreciation day. Remember the goal is to improve your sales so be creative and have fun.
What other tips and sales practices do you use to market to your “A List”?
Regards,
Howard
This is a great post. First time stumbled upon your site. For the “A List”, I would usually send greeting cards regularly for occasions.
Or else, I would even send a thank-you post card after each sale.
Or else, if it is a recurring sales, after each sale, I will send a thank-you sms to ask for any feedback to improve our service.
Great ideas Charles. I also like to send my “A List” clients a birthday or anniversary card if appropriate.
That’s very personal too!
Good points in this post! I encourage business people to think about how much a client is worth to them. Is a card once in a while enough to convey how valuable their business is to you? Maybe you need to do a little more once in a while.
And FYI, studies have shown that up to 68% of clients leave simply because a company does not SAY or SHOW that they value the clients’ business. You work hard to GET your clients, make sure you do something to KEEP them.
Depending on how much you make off each A list client will be dependent on what you do for them. If you make tens of thousands of dollars then it would be easy to spend a thousand if millions then, well lunches, gifts, holidays, etc. Its always recommended to make people who give you business to feel special about doing so.