How many customers do you need?

50. How many customers do you need?

For many sales people marketing seems to be a separate division of the company with its own, unrelated agenda. However, marketing strategies can be used individually to help build your business.

The first step in marketing is to identify your target customer and determine how many customers it will take to maintain your business. Here’s what I mean, using examples from different industries.

Let’s say you wanted to sell residential real estate for a living. You would need to stake out an area that has a minimum of 500 houses. If you began a systematic schedule of contacting these 500 homeowners on a monthly basis, some in person, some on the phone, some by mail, there would be enough houses bought and sold each year to make a living.

Another good example is insurance. You would have to have a list of one thousand households and contact them on a regular basis. There would be enough insurance needs to earn a living. Both examples depend, of course, on your ability to out sell the competition.

Even a nursing home with one hundred beds has to have them filled with residents. If they have ten empty beds for any length of time their expenses go up and their profits go down.

A hospital is in a similar situation. The success of their marketing is measured by their “occupancy rate”. The next time you call on a hospital ask what their occupancy rate is and you will be surprised at how quickly they can give you the percentage.

A manufacturer looking for national distribution needs 200 distributors.

Looking at a restaurant’s business from a marketing perspective can also be measured with mathematical precision. A restaurant needing to sell a thousand meals each week to take in enough money to pay all their expenses needs a customer base of five thousand. A marketing “rule of thumb” for a restaurant is to take one week’s business and multiply it times five. Restaurant customers normally rotate their eating out, so we would want to be sure that we had five thousand people “rotating” into our business at least once every five weeks.

This brings us to our basic marketing strategy as a Distributor Sales Rep (DSR). How many customers do you need and how much do you have to sell each account to make a living?

The average DSR sells a little over two million dollars each year, or $40,000 each week. The average order size in the industry is $500. That means to be “average” you would have to sell 80 accounts $500 every week. NOT A GOOD PLAN!

What if we double the order size to $1,000? That brings the number of accounts down to 40. Forty accounts purchasing $1,000 each week sounds better, however, we are still only “average”.

Let’s give it one more twist. Let’s weed out the low margin price shoppers and carefully select 40 accounts that could buy at least $2,000 per week from you. Now you are investing your time and effort with accounts that will give you sales exceeding four million dollars per year.

It look’s good on paper, as all marketing plans do. However, it is still up to you to make it happen the old fashioned way, by selling.

Comments:

My goal is to determine the dollar amount from your game plan I need monthly to maximize profits. If you follow some type of “plan” daily you remain in contact with current customers and stay on top of new prospects. Going after the most profitable prospects is a good idea. Sometimes the larger the order the less the profit becomes. Typically you give some type of “discount” to become a company’s only vendor. Customers that only use minimal services I provide may be more a profitable account. You have to weigh your options and follow through with achieving your goal, and keep selling. Everyone can always use more customers!

Brooke Knight

I think you do need to know the base number of accounts you need to sell every month to maintain your business, however, you constantly need backups in case you loose a client or their business slows down. But, I don’t think that your base number should be your “goal”, your goals should be set higher than what you need to maintain your business so you continue to grow.

Vickie Reihl

I see the process of building of clientele as a road map. You know your ultimate goal. You figure out the best way to get there. Your plan needs to include contingencies and have enough space that you can deal with emergencies or problems and still move forward. And sometimes, the plan changes so it might need some adjustment. As long as the goal remains the same and as long as you keep taking steps forward to achieve that goal, your plan will help you get there. The key is to ask yourself where you want be in the future and how you plan to get where you want to be.

Yessenia Narvaez

Our company has implemented a strategy to see how many companies we need in our customer base to keep the wheel turning. Each branch needs to have approximately 150 pre-qualified companies in the 90 day planner to plan your calls for the week. The larger target accounts will be visited at least once a week with the smaller classification accounts being contacted bi-weekly or monthly. This is a great way to plan your week and to make sure you follow up with each client in a timely manner.

Gregg Nixon

Vickie Reihl

I think that’s always been the big debate in sales. How many clients do we need? In most industries it can be broken down into a nice neat dollar amount. Hopefully this will make your goal. In other industries it isn’t so clean. You may have a client that spends $500 a week or another client that does $3,000 a week. I think it is a matter of acquiring the correct type of client. We also have to remember that it isn’t always the big client that spends the $3000 that will be with you for the long haul, it might be the small client of $500 that stays with you year after year. I don’t think there is a magical number to how many clients we need, we need a lot of clients as salespeople, the more we have the better we do. After all at some point in time a customer might not “order” for a while.

Brandon Sanchez

I need to have approximately 150 full-time working employees at any given time to meet my projected sales budget. If I have more great. If I have less, not so great. That is why I am constantly selling. In my line of work, the selling never stops. I must sell daily, weekly, monthly, and yearly. I must sell during business hours as well as after business hours. My sales hat never comes off. I wear it at church or the local grocery store. When I am talking to anyone, I want them to be thinking “she knows her stuff” I want them to see that I always have time for them and that I am the same out of work as I am at work. I look at every person as a potential customer. You never know who may be where tomorrow in today’s highly fluctuating job market. But I love what I do, and I know where I will be.

Kathie Luttrell

"The first job of planning is to identify your target customer and determine how many customers it will take to maintain your business."