FAQs for Step 29: Revise Description of Customers
Q: How do I distinguish between primary and secondary customers?
Q: How do I distinguish between primary and secondary customers?
In the simplest sense, primary customers are those most important to your business and the secondary are next most important. When categorizing your customers you will have one eye on how the customers are grouped. For example, you might be serving businesses of a certain type, and then break them down according to their size or geographical location. As well, determining whether a customer is primary or secondary will come down to how profitable the customer or group is to your business. Here are a few other things to consider when rating your customers (or potential customers).
How much revenue will come from the customer or group of customers?
How quickly do they pay?
How profitable are the customers for your business?
Are they long or short term customers?
Are the customers one-time buyers or are they repeat customers?
Which customers do you enjoy serving more?
Which customers are easiest or most cost effective to serve?
We don’t believe there’s any one right way to go about deciding whether customers will be primary or secondary, nor can you really know until you’re business is up and running. Once in business your customers will position themselves by their actions and by the amount of money they spend in your business.
Another thing to keep in mind is that your customer base is likely to change ongoing. Primary customers of today can easily become secondary customers in the future, or cease to be customers at all. And we hope that you’ll always be vigilant for new customers and searching for ways to entice secondary customers to become primary customers.
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Q: Could you explain the relation between the customer profile and the sales forecasts?
A customer profile is a description of your customer or group, while a sales forecast is a projection (into the future) of how much money each customer or group will spend with your business. You will need first to clarify who your customers or customer groups are – then you will know who or which groups to research in order to determine how much you might expect in the way of sales, then you will be able to build your sales forecast.
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