What is your ideal customer profile, and why is it so important when starting your business? Your ideal customer profile is critical when it comes to starting a business and who you’re going to sell to and how you’re going to sell it to them. Because you could waste a lot of time and energy going after accounts that are bad: bad revenue ir bad accounts.
A lot of us as founders and businesses, we just tend to take whatever revenue we can get when it first starts off. The problem is a lot of those customers end up sucking out the resources and really are ultimately unprofitable for us and take away from who we should be focusing our time and energy on.
Finding the Ideal Customer Profile
We need to really take a look at who that ideal customer profile is so that we know where to focus our efforts. A way to do this is to really tier out your accounts. I go through very simple tier 1, tier 2, tier 3, ABC, however you want to segment it out. In the tier 1 characteristics to look for, there is level I information that you can look for which is the basic demographic that you get on any list that you can run through any one of the list services like employee size, revenue size, industry.
Level One Information
There’s honestly some industries that are very good for our services, some industries that are average, and some industries are poor. Size wise, there’s always a sweet spot there. Even if you’re selling to enterprise, or midmarket, or SMB. When I was selling to the SMB market I would run a list that was 10-200 employees. There was a sweet spot and it was 20-60. Because I used to outsourced IT services, and it was $1000-$5000 a month. That’s what we asked customers spend with us. So under 20 employees probably couldn’t afford us, and someone over 60 employees probably had somebody internally that we were going to bump heads with.
So 20 to 60 was my A, 60 to 200 was my B, and under 20 was my C. So those are the basic level one information.
Level Two Information
The other information is what you try to dig for, the level two information. The stuff that really tells you what the internal components of a company that make it a better fit for your services. So who’s the competition in there right now? What is the makeup of their internal team at your selling to? So for instance, if you’re selling to marketing, is it a team of marketers that have individual profiles and responsibilities or is that one marketing person that’s a generalist that you can add value to?
What current technologies do they yse? So there are certain technologies that are much better suited if a client is using those than others. So if you find someone using certain technologies, oh crap! If you find using others, great! We can tie into that! Because the more nuanced you can get with the criteria, and understanding what’s good, average, and poor, the more targeted you can be with your message.
The Importance of Tiering
Once you figure that out how you can tier out your lists and you have your tier 1’s, tier 2’s, and tier 3’s. The tier ones, that’s the quality approach. That’s the approach that you’d sit back, think through, be thoughtful with your outreach. Do research on them before you send an email, so go on LinkedIn figure out who you know you’re connected to.
The tier 2 is that the quantity approach where you run segments of your list and you can say “I want to see every VP of sales in X industry uses salesforce and come up with a message that’s very targeted that group,” and maybe send out 30 or 40 emails at the time or make 30 or 40 phone calls to that group with a very specific message to see if we can get the volume up there.
And the tier 3’s, I used to throw those away because I would always say those bad customers. I don’t even want to get them on board here, but now I really like for one very specific reason and it’s practice. Any time you’re practicing something new about pricing, or discounting, or models that you want to introduce to the marketplace, run a list of your tier 3’s and try whatever you want.
About John Barrows
John Barrows currently provides sales training and consulting services to some of the world’s leading companies like Salesforce.com, Linkedin, Apttus, DropBox, Box and many others. His previous experiences span all aspects of Sales at every level from making 400 cold calls a week doing inside sales to running sales as a VP for his first start up and selling it to Staples.
He’s an active sales professional who has learned a lot about what works and doesn’t work in Sales and loves sharing the tips and techniques he has found to have had an impact along the way. His main goal is to improve the overall education and quality of Sales by sharing ideas and techniques that work.