Finding Your Ideal Customer
Three simple ways to find your ideal customer in your target market
Determining your target market and acquiring accurate data on your sales prospects may be the most important first steps in developing and managing your long-term sales and marketing strategy, but they are also steps worth repeating to ensure your success. Salespeople must continually evaluate and determine whether those initial assessments were on target.
Unfortunately, the old adage that “a product sells itself” is nothing more than a sales and marketing myth. Products sell in large part because of the due diligence that is completed before the first sales call is made. That means taking the necessary time to create your “ideal customer” profile and then securing a high-end database of prospects and companies that match that profile.
To accomplish this, you need to go through a very simple three-step process and revisit the process on a quarterly basis to compare the results with the goals that have been established. Here are the three simple steps to identifying your ideal customer:
1. Review your current client roster.
2. Acquire a spot-on list of decision makers at companies that are similar to your “favorite clients.”
3. Reach out to the key decision-makers at those companies. Think of that process as a “how-to guide” for identifying whom you are selling to and where you are finding them.
Step 1—Who are my preferred customers today?
Your current client roster is the best place to look for potential customers. Doing so is admittedly a little easier if you are an established company and you have 10 or more customers. For a startup, you will need to rely more on your gut and past experiences in each category.
Break down your evaluation of clients into the five categories listed below, and then establish your own benchmarks in each category to match your unique business. Listed are suggested categories and benchmarks from previous dental laboratory assessment projects; they remain the same because the exercise worked.
1. Revenue paid to the client laboratory annually (a client of the author set the threshold at $30,000 per year).
2. Tenure as a customer (minimum of 1 year as a client).
3. Willingness to be a reference for the laboratory business in the sales process (yes or no).
4. Remake percentage over a 12-month period (a client of the author set the threshold at 3% per year).
5. Invoices paid in full within the laboratory’s established open-credit policy terms (the author’s client set the threshold at 15 days from statement date).
Assess each client against those five criteria to create your master list of “best customers.”
This criteria is simply highlighting the people who give you the most, stay with you the longest, say nice things about you publicly, accept your finished products “as is” most of the time, and pay you in full and on time—exactly the folks your long-term sales strategy should be targeting.
Step 2—What do my preferred customers have in common?
Finding the commonalities among your best customers can be time-consuming and difficult to complete internally. If you are up to the task, go for it, but the author recommends using a third party to conduct an assessment of your ideal customer list for two reasons: It will be done faster, and it will free up your time so you can sell. Assessment will work only if you have the following information for each record:
• Type of specialty
• Number of employees
• Annual revenue
• Name of the person who makes the buying decision
• Name(s) of the person(s) who influence the buying process
• Name of the person who may get in the way at the last minute with concerns and questions
You can add geographical information if that matters to you. If you do not have each record completed, you can have your third party fill in the holes. Once you have the full information, you will need to find the similarities. Then, summarize the list in each category and form a consensus on what is most common in each. With little effort, you can develop an easy-to-understand guideline for identifying those you should be targeting. Now, all that is left is to find the leads.
Step 3—Find more preferred leads.
You can go down two paths to get to a large and healthy list of target leads for those ready to buy your products or services: One is to hand over your newly minted ideal customer profile information to your preferred data provider and see what you get back, and the other is to use the data you already have. Some companies are even brave enough to do a combination of both.
Data quality is always an issue when buying lists, so if you do engage a data provider, make sure the provider gives you a guarantee; and be prepared to track bad contacts so that you can return them for replacements. Also, make sure you get great service. This may sound like a cliché, but there usually is a direct correlation between the level of customer service and the quality of the data—the poorer the service, the worse the data.
If you want to use your existing data, that is great, but you will have to conduct one more assessment before you can use it. You will have to run your ideal customer profile against your own database to make sure that the information you have in-house actually matches. If it does, then you are off to the races. If it does not, then you will have to go to a data provider for help.
The three-step process outlined helped a great number of the author’s clients’ businesses over the past 5 years. Be sure to take the time needed to complete the process internally, and do not forget that you have to keep doing it every quarter to make sure that you are still on track. Markets change over time, and you will want to be sure that you can always easily identify your ideal customer.
About the Author
Nick Azar is a business strategist, executive coach, and founder of Azar & Associates. For inquiries, Nick can be reached at firstname.lastname@example.org.