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One of the most reasons for this failure rate is that entrepreneurs don’t identify their target demographic correctly. Without clarifying your core customers, selling is ultimately a function of individual, heroic efforts within the field, not a scalable platform for growth.
The following four steps can reverse this downward trend:

1.Assemble and analyze customer data
Every firm should know the way customer attributes link to core selling metrics, including profitability, cost of customer acquisition and customer-lifetime value. While this information is usually scattered across multiple functions during a company, it’s worth pulling together to determine a standard language of customer value across functions.

2.Get the sector involved
 People in frontline positions hold the simplest understanding of customer behavior because it relates to the seller’s cost implications and will be involved in reviewing the information gathered. What can they tell us about profitable or unprofitable customer attributes? What else could be driving customer acquisition costs during a segment? What are the implications for the organizational change?

3.Determine who actually generates cash
 Implications from deeper understanding of your customers typically involve changes in how you measure sales effectiveness, performance reviews, incentives, product mix, channels and sometimes “addition by subtraction,” or the method of improving performance by not selling to certain styles of customers. the prices of serving customers, for instance, can vary dramatically for the vendor. Some customers require more calls, some buy few large production-efficient order quantities et al may buy more in overall volume but with many just-in-time orders, impacting delivery and other cost-to-serve elements.
Sales people are often dogged optimists in their call patterns, often assuming that there must be a pony in there somewhere. Yet by knowing who the purchasers that generate cash really are, you’re ready to clarify the worth proposition embedded during a strategy and align resources accordingly.

4.Communicate your criteria

The breadth of potential changes means communication is critical. Leaders must devote time and energy to discussing the rationale and what they mean for the business. In practice, most companies don’t take customer selection seriously until things go sour. However, communicating customer criteria now can contribute to faster deciding and greater profit later. The marketplace has no responsibility to tell you whether or not your sales people are barking up the incorrect tree.

It’s your responsibility as an entrepreneur to think through and clarify your customer selection criteria. Done correctly, it can provide a scalable sales model, focus resources and establish an ongoing process for adapting your criteria within the face of inevitable market changes.


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