To organize sales prospects, potential customers can be divided into three major categories:

• Prudent shoppers
• Selective shoppers, and
• Bargain hunters

I recently reviewed a book that does a great job of explaining these three types of potential customers. You can access that review by clicking the link below or click the book’s cover above to buy it from Amazon.

Navigating The Marketplace Review

Organize Sales Prospects: Potential Customers = Prudent Shoppers

Prudent shoppers buy neither the best nor the cheapest products and services. They look for the best combination of good products and services and low prices.

They will often give up some services to get a low price and most often shop at discount stores.

This is the largest group of customers and competition to get their business is very intense. Small business owners should generally avoid trying to compete for these customers.

Organize Sales Prospects: Potential Customers = Selective Shoppers

Selective shoppers want something extra and are willing to pay for it. That something extra varies by the type of selective shopper.

For example, some selective shoppers, “In-A-Hurry” and impatient consumers are willing to pay extra for speed. They want it now.

These customers include business customers who want fast service, including “Just-In-Time deliveries, instant repair of vital equipment, and immediate communication systems”.

Another type of selective shopper is comprised of “I-Want-What-I-Want” customers. These shoppers want customized products and services that meet exactly what they want and need.

Selective shoppers comprise a much smaller group of customers than prudent customers, but they are willing to pay more, and thus, provide a potentially profitable customer base for small businesses.

Organize Sales Prospects: Potential Customers = Bargain Hunters

Bargain hunters give up product and service benefits in order to get the lowest possible prices. They are motivated by “limited incomes, extreme price consciousness, extreme frugality, and sometimes, simply the quest for a bargain.” They often shop at flea markets and auctions.

This group of customers is smaller than the prudent shoppers group. It provides another potentially profitable customer base for small businesses.

Organize Sales Prospects: Potential Customers = Combination

Although most customers can be categorized into one of these groups for most of their purchases, customers change shopping behavior depending upon what they are buying.

People tend to be selective shoppers when they are involved with a product or service, and when they believe significant differences exist between competitors. They tend to become prudent shoppers or bargain hunters when are less involved or see little differences between competitors.

So not only can small business owners improve their target base by concentrating on one type of customer, they can also reach customers who just use a targeted shopping behavior for the particular products or services that the small business offers.

To read more about these three types of customers, click on the book image in the upper left corner. The authors, Wayne and Anna Lovern, are high school friends of mine. I really like their book: Navigating The Marketplace: Growth Strategies For Your Business.

All quotes in this post originated with the Lovern’s book. I recommend it for all small business owners wanting to improve their business, organize sales prospects, and get more potential customers

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Posted 11-7-08:Organize Sales Prospects, Potential Customers Into 3 Types

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Market segmentation and customer segmentation differ primarily because market segmentation concentrates on your target market (potential customers), while customer segmentation concentrates on your present customers.

Market segmentation segments your potential customers from the whole market by considering demographic, psychographic, and behavioral characteristics that distinguish your potential customers from everyone else.

Customer segmentation enables you to target segments of your customers for special promotions. It provides a means of conducting customer research to build customer loyalty, improve customer service and sales.

Customer Segmentation: Consumers and Businesses

One type of customer segmentation is to determine whether your customers are consumers or other businesses.

Customer Segmentation: Consumers

If your business markets directly to consumers, you have to know characteristics of your customers. These characteristics are based on demographics such as age, occupation, education level, social class, gender and race.

Consumer customers have needs that are emotional and rational, and both types of needs should be included in marketing campaigns directed at them. Consumers make purchase decisions based primarily on emotional appeals but need rational reasons to justify their emotional decisions.

You can read more about marketing to consumer customers at

Marketing A Direct-To-Consumer Distribution Business

Customer Segmentation: Businesses

Business customers have different needs than consumer customers. Business customers’ needs evolve around improving their businesses, while consumer customers’ needs evolve around their more personal values, attitudes, family relationships, wants and dreams.

Business customer characteristics are called firmagraphics and include size and age of the business, income, industry, number of employees, etc. It’s just as important to know firmagraphics for business customers as it is to know demographics for consumer customers.

Business customers make purchase decisions based on improving some part of their businesses. Although their purchases are more rational than consumers, emotional appeals are still important. The type of emotional appeals just differ from consumers.

For example, an emotional appeal for consumers may be to become more attractive to the opposite sex, while business customers are more interested in becoming more attractive to their potential customers.

You can read more about marketing to business customers at

B2B Market Segmentation Improves Marketing

Customer Segmentation: Conclusion

Customer segmentation reveals the best appeals for you customers, and often the best potential customers to target.

So although market segmentation and customer segmentation are not the same, they have much in common. Both provide insights to improve your marketing and your business.

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Posted 10-15-08: Market Segmentation and Customer Segmentation

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Success with customer relationship management can increase your business success.

It’s much easier to get a present customer to buy again than it is to get a new customer. So it pays to keep your customers happy. With that in mind, I’m listing seven tips to ensure your success with customer relationship management.

Success With Customer Relationship Management – Tip 1: Keep A Customer Database

You need to keep records of all your customers, what they buy, when they buy, their demographics, and all contacts with your customer service department.

Building this database isn’t that complicated with computerization and customer tracking software. If you haven’t started keeping records on your customers, you need to start now.

Success With Customer Relationship Management – Tip 2: Track Customer Interactions

You also need to keep track of all your customers’ interactions with all parts of your business, from complaints to sales.

This will help you to relate to your customers better by knowing customer expectations.

Success With Customer Relationship Management – Tip 3: Conduct Customer Research

You can acquire a wealth of customer insights by conducting a customer satisfaction survey. You can give your customers a survey when they purchase or send it to them when they have had time to use your product of service.

Many people will complete a survey when they would not otherwise give you customer feedback.

Success With Customer Relationship Management – Tip 4: Use Customer Segmentation

There are many ways that you can segment your customers. Segmenting improves your customer relationship management and your customer relationship marketing.

Just a few of the ways to segment your customers is by buying behavior, frequency of purchases, and demographics. You can read my posts on each of these through the following links:

Success With Customer Relationship Management: Segmenting By Buying Behavior

Success With Customer Relationship Management By Frequency of Purchases

Success With Customer Relationship Management Using Demographics

Success With Customer Relationship Management – Tip 5: Improve Your Customer Communications

Keeping a segmented customer database enables you to communicate relevant messages and offers to your customers. But don’t always be selling something with your customer communications. You want your customers to feel like you care about them, not just about their money.

Success With Customer Relationship Management – Tip 6: Develop A Customer Loyalty Program

One way to show your best customers that you care about them is through a customer loyalty program. Your program should reward your good customers with more than announcements of sales.

Do special activities for them. For example, you could open late one evening just for them.

Success With Customer Relationship Management – Tip 7: Know The Objective Of Customer Relationship Management Program

No matter what activities you undertake for your business, you should clearly understand you purpose in taking action. Customer relationship management is no exception. Of course you want to provide good customer care and quality customer service.

But beyond that, what do you really hope to accomplish with your customer relationship management program? Once you know the answer to this question, you’ll make better decisions for your business as well as increase customer satisfaction.

Success With Customer Relationship Management –Conclusion

These tips tell you how to improve relations with your customers. If you implement them, you’ll have greater success with customer relationship management.

You can also improve your marketing by maintaining a good customer management program. The three links under tip 4, will take you to three posts that specifically deal with improving your marketing through success with customer relationship management.

You may also want to check out these articles on customer relationship management:

Customer Driven Service Standards Provide Keys To Success

Wikipedia on Customer Relationship Management

CRM Customer Relationship Management

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Posted 8-18-08: Seven Tips For Success With Customer Relationship Management

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