‘Know your customer’. It is one mantra that we hear repeatedly for successful sales closings. No secret about it. But what and how? We have enumerated 3 essential things that should be checked to prepare for a sales meeting. The sources to find such information are also discussed below. The level of preparation required ofcourse depends on size of the transaction and nature of product.

1. What does the company do? – This sounds obvious but many times salespeople have no idea! Just take a minute to google about the company and its website to check what it does and identify its industry. Is anyone in that industry using your product/service already? It could help you carry the conversation in the meeting and speak suitably about your product.
2. Who is the decision maker? – Are you meeting a decision maker? This is easier to find out in smaller companies than for bigger companies. For SMEs, you can study the free ownership structure on Tofler.in (at company network tab). Its important because you are likely to run into owners/directors in meetings with SMEs. They are the decision makers. Knowing a bit about them could go a long way. For large companies, LinkedIn could help in figuring the organization hierarchy. If not, then atleast it would tell you a bit about the person you are meeting, his background, work history and interests.
3. Financial performance of the company – There are two questions here: why and how? Why? – because it would set the tone in your mind for the conversation. How much you can ask for your goods and services? How aggressively you should pitch? How much you should negotiate? You can only understand this when you know if the client could pay well or not. Some answers you should look for:
   1. How big is the company? Is the revenue growing or declining?
   2. Is the company in profits and losses? What are the margins like?
   3. Which are the major expense heads of the company? Would your product impact any head significantly?
      Now the next question – How? Due diligence companies and MCA provide this information. You can also check Tofler.in which provides a lot of this information for free on its website.

We all are vaguely aware of the concept of vendor assessment. However, customer assessment is a lesser-known concept. Because who cares to know more about a customer? He is business and one never lets go of the business, right? However, bad debts and default on payments are common problems. In this article, we talk about two essential things that you should check about your customer, every year, to re-evaluate your relationship with them. Ofcourse, you would know a lot just by working with them and through references. But would you be able to tell in time when things start moving downwards?

1. Financial growth and margins: Always check growth/decline in operating revenues of your customers in the last financial year. Then, compare it with other similar companies in the industry. Are the revenues declining? Is it a company-specific decline or is the whole industry facing a difficult time? Also, look at gross margins and net profit margins. Are they narrowing for the company or the industry? Looking at these things would at least warn you of any difficult times ahead and prepare accordingly.
2. Days payable outstanding ratio: This is an important indicator but few people take note of this ratio. It indicates the average number of days a company takes to make payments to its vendors. If your client has days payable outstanding of 45 days, then that’s the average time in which to expect the payment from him. You should check this ratio every year. If it is increasing, then that’s a sign of warning. When trouble starts, the first thing that gets affected is the days payable outstanding ratio.