Question

Topic: Customer Behavior

Definition Of New Customer

Posted by Anonymous on 9/18/2007 at 5:21 PM ET 250 Points
We are debating the definition of a new customer between Marketing and Sales. Our contention is that new means we have never had an order from the customer before and need to set them up with a new customer number. Sales contends that new customers also include orders from a new site related to an existing company and orders from customers who have not ordered from us in that last 3 years. This position was cited as a standard industry definition.
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RESPONSES

  • Posted by michael on 9/18/2007 at 6:07 PM Accepted
    Chris,

    You can decide however you want to define it. Not sure of your industry but I sense it has more to do with the commission paid on "new" business vs "old" business.

    Suppose a company sells a product that only needs replacing every 3 years. Does that mean every sale is a new customer?

    Michael
  • Posted on 9/18/2007 at 7:40 PM Accepted
    I think mbarber is close to the issue. Who cares about the semantic distinction between new and old? There must be an issue that sparked the question, and that's what we should be dealing with.

    On the surface, there's nothing magic about 3 years, any more than there is about 2 years, 11 months, 6 days and 12 hours.

    Deal with the issue, not the superficial distinctions between two different definitions of "new."
  • Posted by Harry Hallman on 9/19/2007 at 6:46 AM Accepted
    Agree with Mbarber and Mgoodman. For me the issue would be do I want the salespeople to re-establish clients who have moved on and do I want to take advantage of existing clients to help me get deeper into a company. If yes, I would agree with sales. If not then marketing is right and they only want to get people as customers they have never touched.

    It is much easier to gain customers through referrals so if it were me I would give them credit for both.
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