The fastest way to fail is to try to please everybody. As a business leader, you need to know which customers to invest in–and which to leave on the table. If you want to understand the ideal target market for your sales efforts, dive into your CRM, identify your best customers, and design the strategy that will accelerate growth for your B2B.
Start with your CRM data
Start with your most valuable asset – your CRM data. Take a look at your top paying customers and drill down into their buying behavior. Answer these questions:
- What do your top customers have in common?
- Which activities (attended a webinar, clicked on an ad, downloaded an ebook) led them to purchasing your product?
You can identify exactly what a “good” customer looks like using 2 metrics:
1. Customer lifetime value (CLV)
Which customers increase their spend over time? How much will each of these customers spend over the lifetime of their relationship with your business? At the end of the day, it’s always more cost effective to retain an existing customer than to acquire a new one.
2. Customer acquisition cost (CAC)
What did it cost your business to secure this customer? Consider the costs of your sales reps, advertising spend, software customizations, and the amount of time it takes to close the deal. Bottom line: Your customers should bring in more money than it cost you to acquire them.
Now that you have a list of customers that value a long term relationship with your brand, spend a minimum amount that makes them profitable, and continue to grow their spend over time, you’re ready to analyze the details.
Use data insights to find patterns
Your CRM software provides reports and dashboards that can help you turn your data into insights. Start by adding columns to your reports that include information about your customers’ industries, company sizes, the job titles of decision makers (and their seniority), locations, and spend.
Patterns will arise and you’ll find similarities between your customers. Perhaps your sales reps are most successful when selling to CTOs at mid-size companies based in the US and Canada who operate in the technology, finance, and healthcare industries.
Use your sales team’s opportunity notes to identify why your customers chose your product over your competitors’. If you don’t have enough of this data, you can always survey your happy customers.
Here are the most common reasons for choosing a vendor:
- Price point: Are you more affordable? Do you offer more features or functionality than your competitors offer at a similar price?
- Functionality: Do you have key features that other companies don’t offer? Can you service industries that have strict regulations like healthcare, finance, or government?
- Contract options: Do you offer monthly pricing and annual pricing (with a discount)? If your customer buys more, do they get better rates?
- Reputation: Do your existing customers love your products? Are your sales reps and customer service team considered trustworthy?
- Urgency: Can you get customers up and running on your product faster than your competitors can?
Create your buyer personas
Now that you have a data-backed understanding of who your customers are and why they buy, you can create buyer personas. Your personas are a component of defining your ideal customer profile and act as a fictional representation of each decision maker. They help your marketing and sales team reach people at high value companies who are more likely to buy from you and grow their spend over time.
List your top industries
Your research could reveal that you sell best to technology, finance, and healthcare organizations. While you might pursue other sectors in the future, focus on the real money makers today. This will ensure steady growth; you can tackle expansion later.
Identify who makes purchasing decisions
Use your CRM’s sales data to determine who exactly is making the purchase at these companies. It’s very likely that you’ll have more than one person involved. In fact, there are typically 6 to 10 decision makers involved in every B2B solution purchase.
Likely, the Head of Engineering is the one who assesses the value of the product, the IT manager who vets how well your product will integrate with their tech stack, the CFO who approves pricing, and the CEO who signs the contract. Repeat this exercise for each of your industries.
Create unique messaging for each persona
Email templates, sales cadences, landing pages, case studies, webinars, and conferences should all be targeted. Generic messaging is boring, ineffective, and impersonal. Give your personas the information they want to hear about.
A CEO will be concerned with the impact to their growth plans, while a VP of Engineering will be focused on solving specific problems holding back the engineering team. A CFO will care about discounts but probably won’t be as involved in functionality. Talk in their languages to show your investment in their success with your products.
Make it easy for your sales team
Route inbound leads from your ideal customers directly to your more experienced sales reps who can give them the white glove treatment, like explaining product packages, pricing, discounts, contract lengths, and payment options. The less- than-ideal customers who come inbound should be routed towards self service options where possible.
When outbound prospecting, narrow your sales team’s focus to prospects who match your value proposition and will deliver a high CLV. Remove low quality prospects from your outbound campaigns entirely. You can still sell to customers that don’t meet your target audience, but you shouldn’t pursue them.
Dos and Don’ts
- Don’t try to solve everyone’s needs. It’s unlikely that every industry can use your products and services. Some industries will have established incumbents that offer more functionality or better pricing than you can. In this situation, your success rate will be too low.
- Do update your personas over time. Things can change fast. You may have focused on VPs of Engineering last year but in the future you might talk to CTOs more. Every year, re-analyze your CRM data to see which job titles or roles are central to purchasing decisions.
- Don’t turn your back on your competitors. You may have a strong use case that your competitors can’t match…for now. Companies are always revamping their offerings and releasing new features. Startup vendors can undercut your price and large providers can expand their functionality to cover your most popular features.
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