Who is your ideal customer? When we sit down with Sales Executives, this is one of the first questions we ask. It seems simple. But it is deceptively complex. Ask four different reps, and you’ll get four distinct answers. Here are the most common responses we receive:
- A list of verticals and titles: We sell to owners and GMs of Retailers, Restaurants, Casinos, and Convenience Stores.
- The best customer: Well, Acme Oil Company has been really good to us.
- The Utopian: A customer who isn’t concerned with price and is low maintenance.
- Product features: Somebody who requires ease of use with low ongoing support costs.
None of these responses are adequate for a world class sales organization. As the SVP of Sales, you should have a crisp answer. Consider this great response from an SVP recently.
Our Ideal Customer is:
- a retail clothing store chain…
- with 50-150 North American locations,
- has an e-commerce solution,
- And a 3rd party IT security provider
He even knew the probability of closing a prospect based on this criteria match. Do you have this level of insight?
Get More Revenue Out Of Your Current Team: Download Our Account Prioritization Checklist. It will get you started on identifying and prioritizing your best customers and prospects.
The SVP knew these details because he had just conducted an Account Prioritization exercise. During this time he uncovered:
- The mega-retailers they coveted (500+ locations) weren’t as profitable as expected. This was due to a lower sales margin and an increased cost to serve.
- Regional Chain restaurants were quickly growing in revenues. This was an unexpected finding. Marketing and Sales were not even targeting this segment.
- Electronics retailers were no longer worthy of sales/marketing attention.
Before this analysis, the entire sales organization was misdirected. Reps had no central direction, and failed to prioritize their best prospects. Afterwards, the SVP implemented a clear sales strategy. He gave reps guidelines on customer time. Business Development’s prospects were scored and prioritized. Account Executives approximated their customer potential and share of wallet.
Here is how to conduct a proper Account Segmentation Exercise:
1) Obtain Current Data: This can be the most difficult aspect of the entire project. Bad data produces unreliable results. Make sure your data is:
- Accurate: Using data that was imported from 1994 isn’t going to give you any insight. Nor is data that has been hastily plugged in by Sales Reps. If you must, use a 3rd party to merge details.
- Sufficient enough to draw insights. Most companies find these fields most valuable:
- Industry (or SIC code)
- Size (sites or employees)
- Revenue (standardized by year)
- Location data
- Scrubbed: This is often the most laborious task when Segmenting Accounts. Don’t overlook it. Remove unreliable data and fill in blank spots where you can. Your results will significantly improve.
2) Analyze Quantitative Measures: Find somebody in Sales Ops or with significant excel experience. Start performing in-depth analysis by the fields listed above. One of the most powerful is a Revenue by Industry and Company Size analysis.
3) Assess Qualitative Buying Behaviors: Don’t assume your analysis is complete after step 2. Get qualitative factors from sales. Maybe a specific industry is overvalued because it had to meet a regulatory deadline. Maybe a geography was impacted by an environmental disaster. Get input from sales and marketing to make your analysis more complete.
4) Complete Segmentation Findings: Wrap up you findings with prioritization of industries and customer segments. You should be able to clearly articulate what the data means. Once that is complete, focus on setting the strategy.
5) Implement and Share Findings with Field: This last step is critical and often overlooked. Once this exercise is conducted, many organizations gather the team and present findings. After that, they release them into the field with a “go get em’” cheer. Nothing changes. Expect more. Make your reps commit a certain amount of time with these top customers. Get marketing to align on these segments as well. Great plans die without proper field adoption and execution.
Your number is made and lost with every interaction. Ensure your reps are having these interactions with the people who matter most. Get more revenue out of your current team: Download our Account Prioritization Checklist and give the field the direction they need to hit the number.