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Using Account Classification is as simple as ABC

This is an occasional series of "CRM In Practice " blogs where we explore not which is the best CRM , but some of the best practice ideas found in CRM which can help you get the most out of your CRM software.

When you implement a system, clients find there is a host of functionality that is pre- built in, but which they may not fully understood the use of. My best example is in MS Dynamics CRM which has a ‘ticket’ field...

We often have to explain this is a field in which 95% of the time we remove. It is used to identify a Stock Market ticker symbol (Microsoft is MSFT) on say the NASDAQ Stock Exchange which unlikely to be used by UK SME’s.

Classifying your Customers

As a first CRM good practice, we will start with Customer Classification.

A Customer in our parlance is someone who has purchased from us and with whom we have an Active relationship, be this on a weekly, monthly or annually transaction basis we treat them as a Customer. In most CRM systems the field is likely to be called Account Typeor Account Status and have a dropdown selection for Customer, Prospect, Competitor, Supplier etc.

However, we know that Not All Customers are the same.

Whilst this simple label can be useful it can be helpful to differentiate between Customers. Understanding and profiling your customers we discuss in details during our CRM Optimisation Workshops. It is important that sales and marketing teams are aware of the differences between Customers.

A useful profiling exercise is the simple ABCD classification which is both easy to understand and which some applications such as Pipeliner CRM include as standard. Using or adding this as an extra field gives an instant view of the Perceived value of a Customer quickly.

We use the "ABCD" classification to focus on potential and call this the Account Class. The selection options are just “ABCD”. Here, we are rating our view of the customers underlying potential. You can compare this approach to using the Harvard Boston Consulting Matrixwhich is a similar concept.

In our own system, we use “ABCD” definitions as follows:-

• A Customers are the best, they are your “A” Class or A Grade clients and are great customers to work with and importantly keep. They should be profitable and you should have a good fit to their needs. In US parlance, they are “Awesome!”

• B Customers have “Big potential “and you will want to develop these into becoming your next generation ‘A’ class Customers.

• C Customers are those who for whatever business reasons you ‘Can’t deal with’. The relationship is not going anywhere, but simply up sucking time and resource. These can hang around so you need to Move them up or Move them out.

• D Customers are either “Dead” or “Divorced” from you and you should recognise this fact. You may want to have one last try to re-engage, or just accept your relationship is finished, you are now Divorced. It’s over, so deal with it and move on! Following on this analogy, you may still want to re-connect at a later stage, things may change.

Pipeliner CRM has an extra selection ‘0’ for ‘unclassified’ or ‘pending classification’. Importantly this is an audited field so you can view the changes in the ‘Audit’ tab. We encourage this with other systems to be a trackable field. It can be useful to see these changes over time, so ensure your sales team add a note with their reason for any change.


By having a better understanding of your customer profile using the simple ABCD classification can help to identify those clients needing more support and who your team should be cultivating and keeping.

We all know of the 80/20 rule and this classification often reinforces this concept, but for your sales and marketing team, it shows instantly in one simple field who to focus on and why with the A for Awesome customer and B for Big potential it is clear. For SME’s moving from start-up ‘finding customers’ phase to growth phase this is a useful exercise in understanding which customers you want to keep and which you need to spend time on developing or dropping.

Introducing some sort of Customer’s Account Classification can be extremely useful, but does need to be monitored and reviewed at least annually. It is a useful field for planning and budgeting to highlight where to invest marketing funds and support.

We talked earlier about the “CRM Optimisation Audit” and this is one example where we review your existing system and processes. Interested in finding out more? Go to the CRM Optimisation Audit where you can download our 2016 checklist, a useful starting point in reviewing your own CRM system.

Find out more about the 'CRM Optimisation Workshop'

by Gary Perkins

26th January 2016