How to classify prospective customers

by | Nov 20, 2017 | Blog | 0 comments

How to classify prospective customers for the cooperation potential

If the company has a well-functioning marketing department with good service and an advertising budget, several units or several tens in the company’s portfolio may be added every few days, in some segments – several hundred potential clients and potential customers. By means of extensive reforms to the structure, operation, and decision-making processes of marketing service, the treaty enhances their effectiveness and enables greater dynamism.

 

Why do we need customer’s potential in marketing?

Let’s figure out why in general you need to determine the potential of the client? There are many reasons why you should “know” about the potential of the client, here are some of them:

  1. Should you provide a report to the boss or it is possible to make a good deal and you should take it?
  2. Would you need to add the client to CRM or how to classify clients in CRM?
  3. Can you determine the readiness of the client to make the deal right now?
  4. What kind of information should be sent to the client by e-mail: the price list or just marketing KIT?

What is “ABC-analysis” and “BANT criteria”?

In fact, for a long time, there is a technology that allows assigning each customer potential or marking the status. The point is that all potential customers are ranked by ABC analysis and divided into groups. Each one starts  working slightly differently than with the clients of another group. It provides the entities with an early opportunity to test their readiness to make a deal right now.

 

Criteria B.A.N.T. ((Budget, Authority, Need, Timeline)) – four evaluation criterias that allow you to navigate the client environment when determining the potential of the customer.

 

BANT was introduced a few decades ago by IBM marketing specialists, and can be regarded as a sufficiently effective form of convenient universal formula.

Criteria for determining the potential of the client (you may face with other types of clients in your practice and other criteria):

 

Customer Criteria (BANT Criteria)
 Index      Criteria A B C

Need		 A Potential Client has a clear, well-formed demand, and your goods and services are able to satisfy it. The client Indicates:

  • The overall scale of the needs;
  • The types of the most appropriate products and goods ;
  • The examples of analogs of competitors and explanations of the choices that can be given
  • a decision or clear understanding  the ways of solving related problems, has chosen the related suppliers and transhipment points.
  • the existence of an approved project, contract for a plan of work
 5

Authority		 Procurement Negotiations and contracting, reaffirming the authority of contact person.

  • A power of attorney and the right to negotiate are available or not
  • The position of contact person in the company is sufficient and meets the authority necessary to make a decision;
  • contact person is a manager or a member of procurement office-managed department
  • Does contact person has leverage on the decision-making process and which ones?
          3

Budget		 Does the potential customer have a poject budget and what does he mean by saying “budget”?

  • the client already has an approved budget for the purchase of products and services,
  • does client has the opportunity to find the necessary financial resources, by lending
  • Does client try with you to indicate the financial requirements for the purchase of relevant products, services
  • Does the client has guarantees or open financing including State financing in the consolidatedsingle draft project financing (in which client carries part of project work and costs).
          3
Timeframe A prospective client indicates clear deadlines:

  • has already determined the timing of the decision required to provide a purchase
  • is in the active stage of exlore and researc of challenges, opportunities and options
  • client has notified timing of the entire project, in which he has only partly work.
  • does the project implementation time depends on the client? If not, does he has an information from whom the timing depends?
          1

In this way, according to the results of the negotiations, after answering a number of simple questions from 4 categories, the client gets a score for each positive answer. The number of points in each category from the maximum possible determines the overall rating from “A” to “C”. By applying the ABC analysis, you can evaluate the overall perspective and the expediency of interaction with the client. If you show a brilliant grasp of the subject and market segment, it is easy to expand the list of questions, with answers to which you will allow to assign status according to ABC-analysis.