Originally posted on August 5th, 2021 on www.cfosimplified.com.
Prospecting for new clients is a lot like fishing, you need to know where to fish and what you are fishing for in order to eat well. The same is true in sales, especially with prospecting … targeting the right buying audience.
Prospecting (or “TARGETING”) is founded both in science and is an art form that requires real world experience. Defined “TARGETING” is the best practice of identifying the characteristics of those prospects … organizations and individuals (personas) … that would make for an AWESOME (“A”) customer.
The benefits of effective TARGETING include:
- Higher Lead-to Sales Conversion Rates
- Shorter Sales Cycles
- Larger Sales
- More Profitable Sales
- More Cost-Effective Lead Generation
- Longer-Lasting, Value-Based Relationships
So where do you start …
First by Grading Your Existing Customers A, B, C or D in order to provide context, using the following definitions:
Awesome: they buy everything you can sell them, then they ask you what more you can sell them; buy on value, buy high profit margin items and never ask for a discount; very rarely shop the competition; pay on time; are a real pleasure to deal with
Basic: they buy only what they need to buy, are hard to up-sell; buy based on a number of factors including … product availability, delivery, value, price, etc.; may ask for a discount or extended payment terms; normally pay on time, but not always; may shop the competition; you don’t get a lot of pleasure from dealing with them … you can take them or leave them
Can’t Deal With: they buy occasionally, usually low margin items; are always looking for a deal and/or special service; take up an inordinate about of time for the money you make off them; normally ask for a discount and/or extended terms and don’t pay on time; usually shop the competition; are frustrating to deal with
Dead: they buy from you rarely or occasionally, always low margin items; are always looking for a deal and/or special service and feel that everything is up for negotiation; take up an inordinate about of time for the money you make off them; normally don’t pay on time and always ask for a discount; always shop the competition; are very demanding and frustrating to deal with; these customers are also referred to as Y, as in “why” are we doing business with them
Next you need to build your Ideal Customer Profile, by identifying the demographic, geographic and psychographic characteristics of your “A” and “D” customers.
Demographics tell you “who” your customers are, in other words, characteristics like … what industry they are in, how long have they been in business, how large are they, what products or services do they buy, and how much and how often do they purchase your products and/or services.
Geographics tell you “where” your customers are located … where are their purchase decisions made and where your products and/or services are to be delivered.
Psychographics will tell you “how” your customers buy, in other words, what reasons they use in making a purchase decision, traits like … values, desires, goals, interests, and emotions, so you can target more effectively.
And then, finally, you should identify a minimum of twenty organizations (or people) you want to put on your list to target (contact). Sales opportunities come from four categories. Make sure when you are building your (top 20) contact list to consider all four categories below.
- Current Customers… what more should they consider buying from you?
- Past Customers… it’s been a while, what should they consider buying from you now?
- Current Prospects… they are already in sales funnel, what do you need to do to close the sale?
- Suspects… who do you need to reach out to that are not already in the sales funnel?
So, if you want to secure new customers that are really right for you and your business, it starts with knowing what a great prospect look like and where to find them. This is not as easy as just “dialing for dollars”, however investing the time up-front will pay HUGE dividends both short and long-term.