May 23, 2011

What Do You Do with Your “D” List Customers?

By Paul Bieber

We all have them. We may not want them as they cost us more than they make us. The take up more time than we can afford to give. They give grief without allowing us to make a fair profit. They are the “D” list customers. The bottom of your barrel. What’s a company to do?

List all of your customers in an high-to-low format, based on last year’s sales. Note where the top 90% of sales come from, and all customers below that line get the grade of D. If you are like most glass businesses, these D-listers call for quotes, but you never get the work, ask for samples, but you never get the order or give you work that you just can’t make a buck on.

On the other hand, some D folks may actually have good potential and you should jump at the chance to bring them up your ladder. If you have 100 accounts on your computer, the top 50 will give you 90% of your business, with the bottom 50% being one-time buyers, serial quoters and very small users of your services.

Here some things you can do to improve your bottom line.

  • Go over the accounts one-by-one and make a phone call to each one asking if they are still in need of your services. Ask them when their need will be, now or in the future. You’ll probably find that half of your list will decline to be on your mailing or call out list.
  • Next, look at the ones that do have potential. Make a personal visit with the key decision maker; make your case for them to include you in their buying program. Let them know you will work hard for their business. If they don’t quote with you or do any business in the next 120 days, give them one more phone call. If this still doesn’t pan out, check to see if you are speaking with the correct decision maker. It is fairly common that multiple people at firms will ask for quotes or place orders, and you need to get someone else’s attention. If you still strike out, delete from your list.
  • With the ones still left, if they quote you a couple of times and you don’t get any orders, politely refuse their quote request the next time around, explaining that you don’t have the time to be used as a quoting source just to get your numbers bounced around. Be firm, but polite. You may gain their respect, but if not, you have lost nothing.
  • When you get repeated requests for samples with no follow-up orders, explain that in the future samples will be charged for. Give them an incentive to order from you. If you charge $50 for samples, give them a $100 rebate on the order. This will get attention.
  • Hold an open house, and only invite the D list customers. Any that show up, you will gladly continue working with. And with no A list customers there, you will focus on the D people, which shows them you are attentive to their needs.

There will always be a bottom 10%. Each year look at this list. It may be your untapped gold mine, or an anchor. Either way, you will move some people up the list and clean up the ones with no potential.