What does your ideal customer or prospect look like? The question is an important one, because too many sales pipelines are still full of prospects that are unlikely to buy anything, that you are unlikely to win, or which if you won would turn out to be unprofitable.
It's simply too expensive, too time-consuming and too wasteful of resources to leave this question to chance. The idea of creating "ideal customer profiles" is gaining momentum, and with good reason: it enables marketing to be better targeted, and it equips sales people to qualify more effectively.
The 4 dimensions of an ideal customer
In most complex B2B sales environments, relying on demographics isn't enough. When we really dig into the common characteristics of our clients' most valuable customers and prospects, we find that four dimensions are at play:
There's no one right answer in any market, but we've observed that different vendors show patterns of doing particularly well or particularly badly with different types of customer - at a level beyond that which can be explained away by the competence of individual sales people.
Let's examine each of these in turn...
Demographics embrace factors like industry, location and company size (typically employees and revenue). It's a necessary foundation for market segmentation, but it's rarely enough to accurately identify your most valuable customers and prospects.
Structural considerations include things like the growth model of the company (organic or acquisitive?), its physical structure (number of regions and sites) and management style (centralised or decentralised). We've found that these factors affect both the trigger events that might initiate a buying process, and the subsequent decision making mechanism.
Environmental considerations include the key trends and trigger events that are affecting the industry and the companies playing within it, comparative growth rates vs. the industry, systems strategies and preferred vendor policies, and issues like the attitude to insourcing/outsourcing (particularly important for BPO vendors and cloud-based solution providers).
The final behavioural considerations include the company's position within their industry (are they a leader or a follower?), the personality of their IT department (are they empire builders or orchestrators?) and their attitude to suppliers (are they partner-collaborators or are they confrontational?).
Uncovering your ideal customer profile
Do you think that these factors don't affect you, or have little predictive value? I'd urge you to look more closely. In our experience (with the caveat that these considerations are relevant to high-value, complex B2B environments) if you dig deeply enough you will uncover patterns of performance that have a high predictive value. If you serve multiple markets or have multiple products, you'll probably want to develop ideal prospect profiles for each of the most significant ones.
Our approach has typically been to combine workshops with our client's customer-facing staff (you might be surprised - and pleased - with the insights your front-line sales people come up with) backed up by in depth conversations with recent past prospects. The resulting information can be distilled into a single page. Some factors have a higher predictive value than others, so we typically rank them on a high-medium-low scale.
Filling in the gaps
Of course, many of the factors in an "ideal customer profile" can't be gleaned through research - they need to be explored in conversation with a prospect. One of the most valuable outputs from the ideal customer profile process is that it can generate conversation maps that enable the sales person to explore those issues which can only be determined through direct contact with the target organisation - and help them in their qualification process.
Putting the ideal customer profile to use
Marketing finds ideal customer profiles invaluable because they allow them to segment their target audience(s) more effectively, and because they can help provide insights into the issues and messages that are most likely to stimulate a response from their most valuable potential prospects.
Sales (and in particular sales management)finds ideal customer profiles helpful because they equip sales people to ask intelligent, high-value questions early on in their interaction with prospects, and because they enable them to qualify opportunities in or out more accurately, earlier on in the sales process.
Have you identified your ideal customer profiles?
How much do you understand about the qualities of your most valuable customers and prospects? And how consistently is this understood throughout your sales and marketing organisation? If you can't put your finger on (and haven't shared) the key demographic, structural, environmental and behavioural factors, you could be wasting a great deal of sales and marketing effort.