Classifying Your Clients

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Despite folklore that talks about the client always being right, the fact is that all clients are not created equal. Some clients are more profitable than others while others hold the potential to be profitable.

Take the time to examine your client base to identify those who provide most of your income as well as those who contribute much less.

Classify your clients into four categories: A, B, C and D clients.

An A client is among your best. They are loyal to your services, pay on time, and buy from you regularly.

They may buy or utilize a large range of your products or services, are pleasant, friendly and provide the promise of growth and referrals to your business.

These are the clients you should be continuously focusing on. Offer deluxe or luxury services to these customers to show appreciation and work toward nurturing profitable relationships.

B clients can be qualified as those who may be lacking in one or two of the above characteristics. Perhaps they do not always pay on time or their purchases are not as regular.

“Take the right action for each individual client, while increasing your profit.”

These clients have potential – the goal here is to convert B clients to A clients. Resources should be focusing on B clients to try and find ways to nurture them into your A group.

C clients spend less and display little potential. However, when compared to the efforts of attracting entirely new clients, C’s still have a part to play.

This group can be very useful in uncovering weaknesses in your services and identifying areas of the business that can be improved.

The last group, the D group, is the ‘headache group’. These clients never pay on time, are price/discount focused and are not worth the time and energy spent keeping them happy.

The D list should be a short list. Consider cutting the clients that do nothing but tax your efforts.

Different clients have different needs. Targeting and nurturing these individual needs can help you make the most of your diverse client list and increase your overall profits.

 

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