Qualifying Your Customers
The Quality of Your Customer Base Determines the Quality of Your Business
After performing your market targeting analysis, it is important to identify your individual target customers. These should be chosen carefully.
It is tempting for new businesses to try to sell product to ALL interested parties, however, this can sometimes be bad for your business. The wrong customers can consume resources that would otherwise be available to customers that are more of a strategic benefit to your business, and can also cause your target customers to flee.
How do you choose your target customers? Start with a well-defined set of criteria, then review all potential customers for fit with this criteria.
For example, in the construction business, we found that the smaller jobs were very low margin and full of competitors. We set a limit of $50K and above for new clients for our business.
In one high tech startup that I managed marketing for, we realized that we had limited resources to handle customers with stringent requirements. We chose to not penetrate the lucrative Japanese market as we knew the Japanese customers were VERY exacting in their requirements and demanding in terms of responsiveness. Our plan was to build infrastructure first, THEN attack the Japanese market in force.
Selling a product to the consumer market may make it less attractive to the enterprise market as well.
The key questions to ask yourself when planning your target customer list are these:
1) Which customers present the best fit for my product?
2) What level of resources will these customers demand of our business, and do we have these resources available?
3) Will selling to this customer create barriers for me in selling to other important customers?
4) Will a press release announcing a potential deal with this customer increase my overall company image?
5) Are my competitors well entrenched in this account, and will they take a massive effort to unseat?
6) What are the prospects for long term business with this customer?
Once you develop your criteria, it is your job as a marketer to ensure that even overzealous sales people stick with the program. This can often be the hardest part of your job!
