Barbara Bix and Melissa Josephson Edwards
Small companies that implement marketing systems to identify their best prospects can dramatically increase revenue and reduce the time and cost of their sales cycles. "Best prospects" are those companies that need what you are selling the most, are ready to buy immediately, and will pay top dollar.
Who needs what you're selling?
It takes a good system to pinpoint your best prospects. Companies can learn a lot about their best prospects by looking at the information they have about their customers from different perspectives. If you don't already have a customer database, this is a good time to implement one for both sales analysis and lead tracking.
Start by creating a process for capturing and analyzing data about prospects and customers, such as length of sales cycle, industry, company size, revenue, referral source, products purchased, price paid and services. Then you can slice and dice the data on a regular basis, noting trends, natural groupings and patterns. Take a hard look at current customers' buying patterns and characteristics, and create a "best customer" profile.
Creating a best-prospect profile can yield immediate results. For example, after reviewing its sales data, a financial consulting firm realized that it could easily boost revenue by concentrating on larger companies. Although they required the same amount of time to sell and provide service as smaller companies, the larger companies were willing to pay more.
A litigation firm used similar techniques to streamline its marketing and operating costs and increase its margins. The partner realized that if he specialized in divorce, he could concentrate all of his marketing efforts on families and the professionals who serve them, such as therapists and educators. Moreover, he could now try all of his cases in a single court with a finite number of judges. Knowing in advance who would hear the case greatly reduced the time it took him to prepare his cases.
What are the similarities and differences among your customers? Which customers are the most profitable to you? Are there certain customer segments that need your products and services more than others—and would be willing to pay a premium? Which customers have the shortest sales cycles? Which are easiest to serve?
Once you pinpoint your best prospects, you can concentrate all of your firepower where it will have the greatest impact.
Not everyone who has a need buys right away. Enhance your best customer profile by understanding why some firms make purchases sooner than others do.
Look for "trigger" events that cause your customers to buy sooner. These can be general phenomena, such as changes in legislation, or events that affect just one company. A company's relocation drives the need for commercial real estate agents, moving firms, furniture dealers and computer vendors. A company's product launch creates demand for services from public relations firms, graphic designers and printers.
What are the trigger events that cause your clients to accelerate their buying processes? Always ask prospective customers how long they have needed your company's products and services, and why they bought when they did.
Many small businesses offer a main product or service and charge a uniform rate to all customers. A business owner of a small software company observed that she was getting more calls from financial services firms and that they were making quicker buying decisions than her other clients. She took this increased demand as a signal to differentiate her offerings and raise her prices. She was able to increase her margins and retain her customers.
Sometimes differences in buying patterns are more subtle and less obvious. This is where marketing systems can provide a distinct competitive advantage. Businesses that analyze their customers and the buying behaviors of those customers on a regular basis often pick up early indicators that some prospects are better than others, even before their salespeople bring it to their attention.
Many companies think of marketing as the packaging, promotion, pricing and distribution programs that happen at the back end of the sales process. While these functions are important, usually the most significant contributions that marketers can make are at the front end. By setting up systems that help you figure out whom to sell to in the first place, marketers can help companies quickly recognize such benefits as more sales, higher-revenue sales—and, by extension, greater sales productivity.
Marketing systems that make it easier to identify your best prospects can help your company take that essential first step to the successful selling of your products and services.
About the authors
Barbara Bix is Principal of BB Marketing Plus, a strategic marketing consultant that works with professional service organizations, and a member of the AccountingWEB Bloggers Crew. Melissa Josephson Edwards is a strategic marketing consultant and an expert in creating marketing communications programs. She can be reached at [email protected].