Is It Time to Revisit Your Target Customer Profile?

Key to the effectiveness of lead generation is a clear profile of your target customer. That is the type of company that you want to do business with and can successfully sell to.

Now, it sounds very obvious, that before you shoot your marketing or prospecting gun, you first need to identify at target and set your aim. However, it is often overlooked, with attention being placed on narrow prequalification criterion instead. Here we will provide your with some tips.

Some Considerations Before You Get Started:

There are two important considerations before you set your target customer profile, that is which customers are:

- The most attractive to your business (in terms of profitability, length of the sales cycle, etc.)

- The most ameniable, given the appeal of your solution (e.g. unique advantages), the level of competition, the willingness or ability of customers to change supplier, etc.

This is something that can, and probably should change over time. For example, you may be targeting companies in manufacturing today that have at least 50 employees, but in time want to be ideally positioned to sell to the more profitable pharmaceutical sector at the high end.

That is you may have a strategic ideal, but are realistic in settling for the lower hanging fruit for this quarter and next. It will also be dictated by which type of companies you have we have a track record, or reference sites suited to. In any respect the profile you create today, is likely to change over time.

Finding it Difficult to Create your Target Customer Profile?

Some company find it difficult to create a profile of their target customer. That is because there is not just one single profile, but many. Alternatively, the criteria may not yet be clear.

That is not a problem, in these cases develop as many profiles as you need. Then compare and contrast them, to determine in what proportions they should be represented in your target list for next quarters sales and marketing effort.

People often ask 'How selective should I be?' Well,that depends on how confident you are in being able to predict who will need your solution. It is good advice not to shorten your list too much at the start, you can do that as you progress. That is because every conversation has value, at the early stages in particular. More importantly, we find that in many cases some degree of experimentation is required before the ideal target customer is clear, indeed all science aside for many companes the sweet spot in terms of the ideal customer is often stumbled upon.

Creating the Profile – What to include:

So, how to define the profile of your ideal target customer for the next sales campaign? Well here are some ways you may want to profile who you should and should not be targeting:

WHO?

• Who are they?

• Who (among our customers) are they like?

• Who are they buying from now?

• Who can introduce us?

• Who are they influenced by?

WHAT?

• What size?

• What sector, subsector, or niche?

• What is its ownership, or org. structure?

• What do we want to sell?

• What solutions are they presently using?

• What solution do they need?

• What priorities do they have?

• What success have we had?

• What references / examples are relevant?

WHERE?

• Where are they located?

• Where are they listed, advertising, attending, etc?

WHEN?

• When is the need at its most (triggers, critical events, etc.)?

• When is the best time to approach them?

WHY?

• Why do they need our solutions?

• What problems, or opportunities do they are have?

HOW?

• How sophisticated are they?

• How long are they in business?

• How much can they spend?

• How much competition is there for their business?

• How have we got an edge?

Other means of profiling might be: What are its aspirations (e.g. high growth company)? What is its strategy (e.g. green energy)? Who are its customers (e.g. price sensitive retail chains)? What end of the market is it serving (luxury/prestige end)?

The Practical Aspects of Profiling Your Target Customers

By now you have figured it out that setting a profile is the easy part. Applying it to your target list is however going to take some work. However, every company profiled and researched ready for contact, or indeed marked as not relevant for contact, has a real value. In terms of building a high quality list, such an entry is probably worth anywhere between 30 and 40 euro. List building and profiling is an investment that will payback beyond any single sales campaign.

The practical value is even greater however – afterall what is the point in making 10 calls, including voicemails, call backs, etc. to be find out the company is not relevant because it is only a reseller, as opposed to a manufacturer, when that information could have been got via the web.

I have to express a word of caution at this point. It is easy to get carried away throughly researching those companies you are considering contacting. I have seen this happen often, with the result that lots of profiling gets done, but very little contact. The objective is to contact companies, as many as possible in fact, the profiling is simply a means of making it more effective, not of stalling, or hindering it. It is important not to make it an excuse for not getting started.

In particular it is going to require that you spend anywhere between 10 and 30 minutes per company to ascertain if they fit your criteria and deserve a telesales call, or a piece of direct mail for example. Again the upper limit here is important, a cut off point in terms of the amount of time you will spend researching and profiling any company before calling is very important.

Anyhow you have also probably figured out that you are not going to find answers to all the profiling questions on the company’s web site, through internet searches, or annual reports. You are unlikely to get them answered on a telesales call, or perhaps even in a first meeting, and indeed maybe you would want to use the limited time available in those instances for more needs related questions.

However, maintaining the composite of the ideal customer for your business is still important as it will inform your view of the potential for a sale right through the sales cycle. The trick with profiling is that it is ongoing, as opposed to once off.

Why Success Requires Strategic Focus

Where companies look for growth has a major bearing on the level of success they enjoy. This is simply a recognition that not all markets offer the same potential for growth.

Those companies that grow fastest do so by carefully choosing where they will compete – they steer themselves strategically into those market niches and segments that are most attractive and amenable.

They don’t seek to have the best solution in the marketplace overall, but do have distinct advantages in meeting the needs of particular groups of customers.

Why Strategic Focus is Important

Here are the reasons why you should focus on particular customer groups, or segements:

1. Your sales and marketing can only stretch so far, so you have to focus your efforts on those customers that can deliver the greatest success. The fact that for most companies 20% of their customers deliver 80% of their profits means that too much sales and marketing activity is focused on the wrong customers.

However, even if your resources were unlimited no company can be all things to all people. So inevitably you must therefore make choices about the customers you want.

Indeed, one of the greatest opportunities to increase the effectiveness of your sales and marketing is to tailor it to specific segments and niches. For example, instead of having one piece of marketing material, or sales presentation for all the industries and sectors you are targeting, tailor it to each significant segment and niche in turn.

2. Some customers are easier to win than others, being more attracted to your solution and more amenable to your sales efforts. Even if everybody needs your product, or solution, there are some that need it more, have specific requirements and can pay more for it. So it makes sense to seek them out.

3. Every company likes to think that it's industry, or segment is different. So they will quickly ask if you done work for others like them? They want to know that your product/solution is specifically suited. They will listen carefully to see if you understand their industry's trends, language and challenges.

Being a specialist (or at least being seen to be specialist) is important because customers think the needs of their business and their industries are special. The big bank, for example, will not be impressed if you experience is with credit unions.

4. A distinctive advantage does not come from being the absolute best, but from being better at meeting the specific needs of particular customer segments. That is because the needs of customers and the way they buy generally varies by sector, location, company size, stage of development, etc.

Successful companies are ordinary companies, but with a clear focus on a key market segment(s) where they have a distinctive advantage. Once they choose their ideal customer they are not afraid to alienate others in tailoring their proposition and message exclusively to that group.

Why focus can be difficult

For most managers the need to focus on the right market segment(s) goes undisputed, however the reality is that many companies struggle in this area.

• Too many companies try to be everything to everyone, but that dilutes the appeal of what they offer. They fail to recognize the unique differences and particular needs of different customer groups and are vulnerable to competitors as a result.

• Too many companies don't segment their market to identify the most attractive / amenable group of customers and don't tailor their proposition and how it is sold accordingly.

• Others make the choice but focus on the wrong segments with disastrous results. Focus, or segmentation, is not just about customers, it also means choosing your competitors, margins, and so on. Hence the importance of making the right decision.

• The main reason for getting the focus wrong is an insufficient understanding of potential customers needs, or competitors. The next is an impatience to get results accompanied by a concern that the chosen market may not pay sufficient dividends.

Want to read more on why you should not try to appeal to everybody?

You should't try to appeal to everybody!

This week I met a sales manager who told me that his solution appealed to almost all segments of the market.  

To this he added, that the functionality of his product was comprehensive - addressing a multitude of customer needs – sales, administration, accounting, etc.  

Was I impressed?  Well, confused is more like it, and that is the same way his customers are likely to be.  The manager and his message was less credible as a result.

Even if your product genuinely 'does everything for everybody', successful marketers know that you have to slice and dice your market and your proposition in order to maximize its market appeal.   Some call it market segmentation, others refer to it as sales focus.

In fact the surest way to dillute your appear to the market is to try to appeal universally to all customers, thereby failing to address the specific needs of any particular customer group.

Success requires tailoring your proposition to different customer groups, or segments so that the key ones feel your solution is ideally suited to their specific needs.  If you alienate other potential customers (outside those you have specifically targeted) so be it. 

Similarly, to get your message across you are going to have to focus in on one or two specific key benefits most relevant to each segment.

Another Manager I met recently told me that there were 4,600 potential customers for his technology solution.  Was I impressed?  Well, yes.  Particularly, as he had a list of them and could tell me how much progress had been made against it!

Want to read more about the importance of strategic focus?  

Does your customer really ‘get it’?

Sales people often complain that although they have a 'great product, or service' the customer fails to realise, or appreciate it – 'the customer just doesn't get it!'

If you think about it logically there can be two possible reasons. First, you don't have as good a product or service as you think, or secondly (and more likely) you have simply failed to get the message across about how great you, or solution are.

Now, I look through hundreds of web sites and marketing brochures every month and I also sit through lots of sales presentations. I never fail to be amazed how many of the companies are actually under-selling what they have to offer. They fall way short of giving the customer a compelling reason to buy.

If you want your customer to realise how good you really are then take another look at your sales pack, web site, marketing brochures, etc and make the following 5 changes:

1. Focus on providing solution to the customers problems, as opposed to a product / technology

2. Communicate business impact of your solution, as opposed to the features

3. Quantify the benefits as a result of your solution

4. Tailor the message to different verticals / segments (as opposed to one message or one website for all)

5. Tell more stories (in particular stories that relate to the top 5 problems, or advantages of your solution

What is the end result of all this? Well it makes it easier for the customer to buy