I worked for years to get a coveted prospect to buy from our company, and was not successful.  After being promoted to manager I reassigned all of my prospects to an experienced sales rep from my unit, who quoted and sold the prospect that I thought should have been my account for years.

She advised that we had ‘won’ the business and that we were going to do a meeting to introduce our team and ‘install’ the business.  Three weeks later, she lamented, “This is the most difficult account that I have ever worked with!  Nothing is good enough.  They demanded new and special payment terms, they still have not paid their deposit, and they want to tell us what suppliers we need to work with.  I am not sure that we can last with them!”

Well, this situation is not unusual.  It is difficult to know how much trouble a new customer is going to be until they are in the fold.

What is A Good Customer?

It sounds simple enough to suggest that as a sales professional you would want as many of your customers as possible to be “good” customers.  They won’t all be good customers, but the reasons why you want the good ones is because they are predictable and can be an advantage for your.  In sales you need every advantage you can get so you want to align yourself with the kind of customers that everyone else covets.

We will simply define the traits of a good customer:

• Prompt and responsible in payment
• Communicates well
• Provides unsolicited feedback on you and your organization
• Suggests customers/clients for you
• Acts as a reference for you and your company

This list is not all-inclusive as I am focusing on the main customer traits that benefit the sales professional.

Prompt Payment – You know this drill!  Some sales professionals don’t get paid until the monies are collected.  Any client that is delinquent, or elects not to pay costs you and your company ridiculous amounts of money.

Communicates Well – This customer is respectful of your time and efforts and lets you know by communicating meaningfully and with intent.

Provides Feedback – Gives relevant feedback to you on your efforts and your company’s products and services.  Gives feedback the right way, personally and constructively.

Loyal – Loyal customers give you an opportunity to rectify any problems or deficiencies, including pricing issues, before making relationship-ending decisions.  They stick by you and do not make a change for nominal differences in price.

Refers Customers to You – This customer will refer their relationships and ‘business friends’ to you recognizing that they will be taken care of and will receive the great service that you give to them.  This is extremely important to Black sales professional as it gives you an opportunity to have the credibility that the referral gives you to help make the sale.

Acts as a Reference for You – You can count on this customer when you have a new relationship and need someone to sing your praises.  Again, this is important to the Black sales professional for the reasons above (Refers Customers to You).

The Intangibles – They Cost Money!

Spend some time doing a good evaluation on your customers.  Be careful though, as it is the intangible items that really cost money.  A relationship with a customer who pays late, ask for more, and will leave for a dime is not going to end up good for you.

Be cognizant of the intangibles as the costs are hard to recognize.  Do you have to provide additional services and visits because they won’t do what all of the other clients do?  Are they unduly critical of your team and your service personnel?

Know whether the complaints are justified, and if not, you must, I repeat must; stand up for your team.

Customers…We Can’t Do Without Them

I comment often that “we can’t do without them”, and that is the truth.  They are the reason that we exist in our respective roles.  It is our job as sales professionals to make sure that we get the right ones.

In our effort to survive and prosper in our jobs, we sometimes take on customers who do not deserve us.  I am sure you know some now.  If they get in your way of prospering and selling to other clients, they are costing you money.    Think about it hard!  Consider at what point you take action if it is problematic.

What is the Lifetime Value of Your Customer?

Give some consideration to figuring out the lifetime value of your customer.  We are talking about an economic value.  This isyour lifetime value, not the lifetime value that your company receives.  This figure is based on the length of relationships, the revenue received from the relationship in terms of bonus or commissions and the amount of compensation that you receive from their referrals, references, and other contributions to your existence.

The lifetime value could be estimated by knowing the following:

• Average annual revenue (commission/bonus) from your customer.
• Average period of time a customer stays.
• Total revenue earned from this customer’s referrals.

Oversimplified, here is the quick and easy formula to show relative lifetime value.  Relative means that you can compare it against your other clients effectively:

Lifetime Value = [Annual Commission Revenue  * Average Period of Relationship] +Total Revenue From Referrals

Or…..

LV = [ACR *APR] + TRR

Here is an example:

Customer A:

Annual Commission Revenue – $20,000
Average Period of Relationship – 4.5 years (company average)
Total Revenue from Referrals – $0

LV = [20,000 * 4.5] + $0 Referrals
LV = $90,000

Customer B:

Annual Commission Revenue – $12,000
Average Period of Relationship – 4.5 years (company average)
Total Revenue from Referrals – $ 30,000

LV = [12,000 * 4.5] + 30,000 Referrals
LV = 54,000 + 30,000
LV = $84,000

In both examples you can see the effect of referrals.  Customer A pays the bills, yet they are not helping your revenue as much as Customer B, who is a good customer overall as they referred you to new relationships and new revenue.  The moral of this story is…”Customers are not created equal”.

The total referral revenue is understated as it should show revenue from the referral relationship in total, and that could be much more substantial.  I hope you see the logic.

Always do a good evaluation and realize that a good customer is more than the commissions or bonus from that customer.  Know the facts.

Your comments are welcome.

This is, and will remain, an important topic.  No matter whether it is the 60s, 70s, 80s, 90s or any decade in the 2000s.  Some things will get incrementally better, yet hope that they will change is still an interesting premise.

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This post will reinforce the fact that the customer makes choices, and the sales professional must determine the way to interface  and find success.  This post will show clarification of my view on racial perceptions, racial preferences, and racial prejudices. I will also expand on some previous posts as to ways to change increase effectiveness when faced with preferences and prejudice from your prospect or buyer in some of my upcoming posts.   I have dealt with it in earlier posts; yet will impose a more striking angle in the upcoming posts.

The reality is that an understanding of these two items is essential in the day-to-day activities of the Black sales professional.

The 3Ps – Perceptions, Preferences, Prejudices

Racial Perceptions

Perceptions can slowly be changed.  They exist, and come from many sources.  A person’s life experiences, the media, parents, friends, and the knowledge and ignorance of interaction or lack of interaction formperceptions.  When these life experiences are negative, we have negative perceptions that fuel preferences and help substantiate prejudices.

Perceptions are normally wrong based on their application against a group of people based on some input which was either not factual, or was spread across a group of people without warrant. We will talk more about perceptions in an upcoming post, exposing activities that help to give credence to the negative perceptions.

Perceptions are prevalent in all racial and ethnic groups, and we should not criticize perceptions that we disagree with if we are going to carry perceptions of our own which are damaging to other races or ethnic groups.  We all need to fight against this activity.

Racial Preference

Preferences are a different and are powerful.  They are not always meant to be deleterious to a race or ethnic group, yet can have the same effect.   Your customer’s level desire of whom they want to work with is directly related to their relationship comfort.  That does not make it right.   Some of the preferences come from perceptions and some come from prejudice, yet preference is more substantial than those two inputs.  Comfort levels, familiarity, a lack of understanding, and some “lumping” of people into groups based on common elements manifest preference.

As an example, putting all Hispanics or African Americans into respective group on the basis that their ethnic background and “perceived” activities that are similar in nature is a perception which can be damning.  It is not often thought of that way, yet it is true.

Whether it is preference or it is prejudice, the effect is the same; lost opportunities, lack of diversity, locking out of good people of all races and ethnic backgrounds.

Racial Prejudice

Prejudice in life, and what we do from the standpoint of an occupation is wrong.  If we define prejudice as Webster does,  “an irrational attitude of hostility directed against, [in this situation] a group or race”, it is insidious.

To discriminate because of race, ethnicity, or gender is at the base of everything we should never endorse.  When it comes to sales, it is no different.  It is not manufactured by anything substantive, but is fueled by narrow-mindedness.  I am sure you recognize that if it is wrong for one group, it is wrong for all.

Prejudice changes the landscape.  It cannot necessarily be changed, and any changes may well be short lived.  It robs the Black sales professional of opportunity and in some cases, based on your territory, success, yet exist, and will not be removed from the marketplace in my lifetime.

I will aver in an upcoming post that as sure as we are that prejudice exists, it is much less prevalent than the problems with preference.  This, we need to recognize.  We can change perceptions…we can overcome preference.  Should we spend time trying to solve or sell when prejudice is involved?

Blacks who discriminate against Hispanics or Whites in the sales arena are in the same “boat” as other ethnic groups that discriminate.  Whites who are in positions of power get more attention because of their roles.  The truth is that prejudice whether in a role of power or any role is wrong.

Why is this a Big Deal?

This is a big deal because recognition and tactics are so important for success.  There are tactics to defeat racial preference.  There are tactics to nullify and change negative racial perceptions.  Racial prejudice is different.  It is pervasive and even in situations where you are given the business, a positive relationship does not exist, so the business is potentially borrowed anyway.

There is no situation more gratifying than enjoying your occupation and getting a fair opportunity to perform it to your best ability.  Learning what you can change and what you cannot will conserve energy for redirection to positive tasks, as well as promote growth.

I hope you will read these items in the next couple of weeks.

Please check the upcoming posts tab for a general listing.

Your comments are welcome.