A Different Way To Size Up Your Customers

Grade-A managers know their jobs and roles well. They are more assured and confident than inferior managers. They understand the need to delegate and the strength of a good team, so they have little problem being surrounded by people who are as good as or better than they are. They enjoy and relish people who think creatively, take calculated risks and push the envelope.

In contrast, Grade-B managers aren't as strong in their jobs or thinking. They're often fearful of people who think creatively and push the envelope. They will be the first to do a task themselves rather than delegate, and they don't like to share credit for success. They're always looking over their shoulders for the next person gunning for their jobs. They hire inferior people so they don't have to face competition.

Grade-C managers are simple folk. They never really move up, never break through, never take chances and always surround themselves with the wrong people.

You see A, B and C managers everywhere. But does this logic apply to more than just managers? Does it also apply to, say, customers? More specifically, is it a way to differentiate small and midmarket customers?

Adam Robison, CEO of Irvine, Calif.-based solution provider GovPlace, recently turned me onto this concept. While his business deals mostly with public-sector customers " state and local government and education -- he sees this fragmentation in customers all the time and hears about it from peers.

Why could this possibly be important? Think about it: If small (20-99) employees and lower midmarket (100-499) customers are the rich crop of prospects that will fuel channel growth for the foreseeable future, you must understand their nature so you can target them more effectively.

Grade-A customers are those that understand the value of IT, the need for systems (not just point products) and the role of solution providers in servicing and supporting their infrastructures. Grade-B and Grade-C customers don't understand IT; they don't get the need for investment and they don't get the need for support services.

As Robinson noted, Grade-A customers will listen to your story because they get the need for systems. They are your preferred customers because they typically have well-thought-out business plans and objectives and are willing to invest to grow their enterprises. Grade-C customers know they need a PC, printer and Internet access, but don't try to sell them a system -- they just won't get it.

Because the nature of Grade-C customers is to be more laggards than progressives, because they're more self-sustaining than in growth mode, there is little any solution provider can do to convince them to invest in complex systems or IT services. The question Robinson provoked: Why bother with Grade-B and Grade-C prospects?

It's foolhardy to blindly target small businesses and midmarket companies. By not understanding the nature of these customers, solution providers will face frustrating sales engagements, longer sales cycles, smaller deals and lost opportunities because they were distracted from better prospects.

Likewise, this means of identifying and segmenting customers also means re-evaluating the potential for small and midmarket business. This doesn't mean you shouldn't sell to Grade-B and Grade-C customers, but you should treat them differently, more transactional than valued, extended partnerships. It will allow you to maximize your time and resources, enabling you to target more lucrative customers that will deliver more value over time.

It's an interesting theory, and vendors do the same thing to solution providers when they tier their partner programs.

Is it what you're seeing in your market, among your customers? Do you think there's any way of upgrading a customer or prospect that doesn't get the value of IT? Share your thoughts with me at [email protected].