Not all business is good business. Just because a company is in your target market doesn’t mean you want to do business with them. Even if your target market is well-defined, not all the companies will be a good fit or have a need right now. It’s the salesperson’s job to qualify the prospects, and part of qualifying is determining how “ideal” they are. Are your salespeople trained to identify your Ideal Customer?
Typically, qualifying determines whether there is a need and a budget. If there is, the next step to qualifying is determining if there is a good fit between the prospect’s need and your solution. If the answer is yes, a good salesperson will identify all of the buying influences involved, learn the buying process and collaborate with the team to gather all the needed information to move the opportunity forward. You close the deal and have an ‘ideal’ customer. That’s all there is to it, right?
If that is the case, then how do you end up with customers you complain about and probably shouldn’t be doing business with?
There is something missing in your qualifying process. You are determining that they can buy and want to buy, but not whether they are a good fit, an Ideal Customer, and you want to sell to them.
Eyes Wide Open
What? You’re thinking, she is crazy! Of course, I want to sell to them. They are buying what we offer and you want your salespeople to sell it to them and hit quota.
Since it’s more profitable (and more fun) to have Ideal Customers, it’s best to determine how ‘ideal’ your prospect really is before you move forward. Just because they want to buy and can, does not mean you should sell to them. Once you’ve determined if they are a good fit, move forward. If they are a “less than ideal” prospect at least you’ll move forward with your eyes wide open.
Below are 4 Steps That Will Help You Find Your Ideal Customers.
1. Define Your Ideal Customer
What is an Ideal Customer anyway? Ideal customers are the ones you love doing business with and they love you.
- They pay their bills on time.
- They respond in a timely manner.
- They write testimonials for you.
- They appreciate your customer service.
- They treat you well.
- They give you the opportunity to resolve problems.
- They let you know what you can do to make their experience even better.
Demographics and Psychographics
Most of the things listed above are hard to know until they become your customer. They are psychographic indicators. They are more touchy feeling than measurable. So how can you predict whether a company will be an ideal customer before they become one or if they will become your worst nightmare?
Build a list of demographic and psychographic criteria that you can use as a filter. Demographic criteria are tangible and measurable like location, size, revenue and profitability (in the case of a public company) etc. Psychographic criteria are intangible and harder to determine but you can find out by reading about companies, asking other vendors, asking employees, asking questions and watching behavior. Choose 5 or 6 things that are the most important. It may be hard to slim your list down because so many things are important, but this list is a list of the most important. You’ll see an example as you read on.
Why is it important to define?
So, you can easily identify them. There is a subset of your current customer base that is ideal. It may be small, but it’s there. If you can identify them, you will be better able to identify ideal prospects.
Here’s a quick exercise you can do.
Rate Your Top 2o
Make a list of your top 20 customers. They are Top 20 based on size, revenue, profitability, prestige or all or some of these. Once you have the list start looking for commonalities and list them. Use those commonalities to build your list of criteria.
- Develop the criteria. Choose 5 to 6 at most and a mix of psychographic and demographic.
- Using a rating scale from 1 to 5. Five is the best fit possible and one is not a fit.
- Apply the criteria to each of your 20 clients and give them a score.
They were on your top 20 list, should they be based on their score?
- HQ in North America – Rating = 5
- 100+ Salespeople or distributors – Rating = 4
- Values people – Rating = 5
- Profitable – Rating = 5
- Innovative – Rating = 5
With the 5 criteria above, total and then divide to find the score. In this case the total is 24, divided by 5 and the score is 4.8 out of 5. They are a good match to the criteria and an example of an ‘ideal’ customer.
When you do this for the top 20 you will start to see a pattern in the types of customers you have which will later help you know what you are looking for in future clients.
2. Fit Your Ideal Customer with Target Market
How do you find more ideal companies to prospect? It’s easy to build a list based on the demographics of your target market; their geography, industry, employee count, SaaS products they use and revenues (if they are public).
It’s not as easy to find out if they are ‘ideal’ according to your psychographic criteria. The messaging on their website and social media might give you some clues, but only working with them will give you a solid answer. There are clues during the buying process and now that you know what you are looking for, it will be easier to find. Develop questions to ask that will help you know if they fit your psychographic criteria.
Build an Ideal Customer Profile
As I mentioned there are two parts to the ideal customer profile, the demographics of your target market (tangible and measurable) like I listed above and the psychographics (beliefs, culture, values).
Here’s an example of an Ideal Customer Profile.
When prospecting, you can buy a list or build one yourself. You’ll find hundreds of companies that fit the demographics and they may end up being your target market, but not all of them will be ideal to do business with. You can generate leads from this list. Then the qualifying work begins.
3. Use the Filter
Your ideal customer profile becomes your filter. It allows you to qualify prospects, not just on demographic criteria or on their need and ability to pay, but on the basis of whether you will enjoy a high-quality relationship. Whether they will become loyal customers that provide repeat business and referrals or whether they will be a company you and everyone else complains about.
There should be a Zero Tolerance Policy for complaining about customers. One of the reasons there is so much complaining is because we do business with anyone in our target market rather than trying to find our ideal customers.
That’s where the salesperson kicks into gear. They research and look for signs. They may look at a site like Glassdoor to see what employees say about the company. They will watch what is posted on Twitter, Facebook, and LinkedIn. They will read the message from the president. They will ask around. They will learn some of it from the meetings they are having with interested buyers.
That’s where great salespeople shine. They take the information from their research and make a great plan. Then they build trust and have great conversations asking all the right questions. They listen, learn, educate and collaborate. Through that process, they determine if they are a good fit, not just solving the need but the kind of fit that brings in a customer for life, an ideal customer.
4. Dream Big
It’s unrealistic to believe we can only do business with companies that fit our ideal profile perfectly, but wouldn’t it be amazing. What if we tried a little harder and more of our customers were ideal. Imagine what that would be like. It’s silly for me to suggest that all your customers should be ‘Ideal’, but wouldn’t it be nice. Dreams can come true, at least to some degree. A percentage of your customers will be ‘ideal’ and a dream to work with. It’s up to you. I can tell you that if you know what you are looking for, it’s a lot easier to find and attract. Determine what that means for your company and what you are willing to do.