I wonder how many outside salespeople reading this article allow the Pareto Principle to determine how they allocate how much time they spend with each of their individual customers? If you're not sure, perhaps you know the Pareto Principle by another name -- the 80/20 rule.
All customers deserve to be treated fairly and ethically, but all customers don't merit the same amount of your time. So by categorizing them, it's a lot easier to determine how and where to concentrate your selling time.
Let's begin with listing your prospective customers as a target category. Not all prospects are necessarily viable prospects. Some of them are not creditworthy. Some of them are simply too small to justify the time it takes to cultivate into full-blown customers. So, even your prospects must occasionally be pruned.
Up until the time the prospect makes his or her initial purchase from your company, you're on the outside looking in. Your goal at this point is to earn the right just to quote the prospect, so just about every tactic you use is designed to gain credibility. Without the prospect's trust and confidence, you are highly unlikely get an initial order, regardless of the competitiveness of your pricing.
You're also attempting to build a relationship with the prospect during the early stages. Because prospects almost never buy from salespeople they don't like, many of the initial calls you make must be designed to build the beginnings of a personal relationship.
But just as soon as you do earn your first order from a prospect, your strategies and tactics must change. Just don't make the mistake of believing that your incredible sales skills have eliminated the competition. Just the opposite may be the case. Your new customer may be merely using you as a vehicle to get your competitor's attention.
However, once a prospect does make an initial purchase, he or she must be moved into a different category-the Development Group. While the Development Group is "on the books," they most likely retain quite a bit of loyalty to the competition. But you do have your foot in the door, which is an essential first step.
The next goal for the Development Group is to get them to begin making repeat purchases on a regular basis. To move them out of the Development category and into the next category, you must work harder and smarter than ever. Consider the following sales tactics:
1. Explain to your operations manager that this is a new customer. Ask him to make sure that he goes the extra mile to ensure that there are no backorders and that he makes certain that the company lives up to its delivery commitments.
2. Coordinate with your dispatcher the timing of the initial delivery so you can arrange your schedule to arrive on the jobsite at the same time the driver makes the initial delivery. Wow! This is really impressive. It shows the new customer that you're not taking lightly the opportunity he has given you.
3. Especially during the first month or two of the new relationship, take time to personally go over each of your new customer's invoices. You might gain extra mileage if you attach a note to the statement, communicating that you have reviewed all invoices for accuracy.
Once the customer begins to purchase from you on a routine basis, it's time to move him or her into a new category -- Regular Buyer. These are the customers who have learned to trust not only you, but your company, as well, to take care of their product and service needs. You have proven yourself, so now you are an "insider."
This is when the 80/20 rule comes into play. Among your list of Regular Buyers you'll find a group of Nucleus Buyers. This group will make up the majority of your sales and therefore deserve the lion's share of your attention.
Be cautious not to allow your attention to be diverted by the occasional large prospect that, out of the blue, makes a large purchase. This could represent a one-shot deal or a series of several large, but sporadic purchases.
Customers can earn Nucleus Buyer status only if they have first become Regular Buyers. So to get the most mileage out of your selling time, work customers according to their category.
Bill Lee is a business consultant, columnist, speaker, and seminar leader who works extensively throughout North America. He also is affiliated with Lee Resources, a Greenville, S.C.-based consulting, training and publishing organization. This article originally appeared in the July 21 edition of the Florida Building Material Association's newsletter.