3 Reasons why you should qualify your customers carefully
If the shoe doesn't fit, should you still wear it?
Too many businesses work too hard selling to customers that don't fit.
Every business has an ideal customer; a customer whose demographic and psycho-graphic profile make that customer an ideal fit for the company's offering. And because we live in such a diverse world, not every customer will fit that profile. And if a customer doesn't fit, no amount of effort is likely to make that prospect a happy promoter of your brand. Just as its important for a business to size up and identify a customer's ability to fit into that profile, it's equally important for a business to identify those who don't. And if the customer doesn't fit, don't sell to them.
Early in my sales career, I was hell-bent on hitting my quota. So rather than viewing each prospect through the lens of ideal customer profile, I viewed them through lens of potential revenue. There were times when I worked extremely hard to sell my product to a prospect that didn't quite fit. Sometimes I was successful, and other times, I was not.
The efficiency of selling, and the efficiency of any activity can be measured through Return on Effort. Return on Effort measures is the quantity of desired results you achieve, in proportion to the amount of effort you invest. The objective is to achieve a lot of results through minimal effort. If you work this way, you'll have more "effort in the tank" to achieve more results. (Or, you may choose to invest that extra effort in refining your golf swing.)
Back in those early selling days, I was using too much effort twice. First, since I was selling to prospects that were a poor fit, I had to invest more time and effort to convince the prospect to buy my solution. In other words, my average sales cycle was longer than it should have been. Instead of completing a sale from the first call to the signing of contract in 30 days, I'd be spending 60 to 90 days to achieve the same result.
Once the new customer began to use the product, it took more effort to keep the customer happy, since the product wasn't a perfect fit. So I'd inevitably invest more time making more account management calls in attempt to appease the customer. Time spent there was time that I couldn't be out selling to new customers, generating new revenue.
Since I was spending too much time selling and keeping customers that were not a good fit, my Return on Effort was low. But that's not all that was low. Since the product wasn't a perfect fit for the customer, I'd usually have to make a price concession to help the prospect justify the purchase. And price concessions reduce profits.
Wasted effort selling the prospect, wasted effort managing the customer, and wasted profit are three good reasons to carefully select prospects that fit your ideal customer profile. Have the discipline to disqualify. Don't invest your effort into selling to the first prospect you see; instead, invest that effort into finding more qualified prospects.
There's nothing like the comfort of a shoe that fits.