In this blog post, we define the company and operational characteristics. And we use this to build an ideal customer profile. And we will present the other five characteristics in future posts.
You created your team. Then you gave them the task of developing your ideal customer profile. And your ideal customer profile is your ideal prospect. The one you can pick out from all the other prospects. And this helps you realize who is not a perfect fit for your offerings.
Put together an ideal customer profile. And you do this by your team looking at specific characteristics. And here, we look at Company Characteristics and Operational Characteristics.
Learn about the company characteristics as a basis for your ideal customer profile. Then you ask a series of questions and perform some analysis.
Ask About Behavior
Your first questions evaluate your best customers. And recent deals you won. Identify your best customer according to repeat business, revenue, and margin.
Ask the following questions of your best customers. And the last five deals you won to determine how these companies do business.
- How did the companies behave during the sales cycle?
- Were they open, inviting, honest, and forthright? Or, was it challenging to communicate with them?
- Did your contract negotiations go smoothly? And were they uneventful, or tense and tiresome?
- Were you able to position and sell all you had to offer?
The answers give you the barest foundation for your profile.
Now you consider the size of the companies.
- What size are your best customers? And the companies in the most recent deals you won? And who are you selling to — small, medium, or large companies?
- Is there a pattern to be found in the size of the company you sell to?
- If you sell to large companies, do you sell at the corporate or the division level?
What Is Their Business Philosophy?
The third group of questions deals with business philosophy.
- What are the business philosophies and ideals of your best customers and recent wins?
- Does something else distinguish these companies from others? Such as feelings about quality or focus on quality versus price?
- Are cost and availability the characteristics that turn them into customers?
Knowing the ideals of your best customers helps you find prospects that are swayed by more than price.
How Do They Buy from You?
How do companies buy from you? And consider that the way they buy may change over time and as your solution matures in the market.
Where are these companies in terms of the Product Adoption Life Cycle? And are they:
- Early Adopters?
- Early Majority?
- Late Majority?
Use the answers to refine your sales approach. However, concentrate your efforts on early and late majority companies. And this is because that is where most organizations fall.
Early and late majority companies are defined as follows:
Early Majority (34% of companies) – Individuals in this category adopt an innovation after a varying degree of time. And this time of adoption is significantly longer than the innovators and early adopters. The Early Majority tends to be slower in the adoption process. And they also have above average social status, and contact with early adopters. And they seldom hold positions of opinion leadership in a system.
Late Majority (34% of companies) – Firstly, individuals in this category will adopt an innovation after the average member of society. Secondly, these individuals approach an innovation with a high degree of skepticism. This is after the majority of society has adopted the innovation. Thirdly, the Late Majority is typically skeptical about an innovation. They have below-average social status, and very little financial lucidity. And these Individuals in the late majority and early majority show very little opinion leadership.
Here is a hint regarding selling into early and late majority companies. Early majority requires several metrics-based case studies that prove your value. And late majority companies require even more metrics-based case studies. Ones that prove your value. Furthermore, the late majority want them to be very similar to their business. And the further you are in the technology adoption life cycle, the more proof of value you will need.
Review your best customers and recent wins. After that determine what industry sectors are represented. As well as recognizing these as the sweet spots to prospect.
Furthermore, ask yourself which industries does your solution best fit? And think of broad industry groups. Then narrow to the specific verticals. And use the Standard Industrial Classification (SIC) codes. Or, the National American Industry Classification System (NAICS) codes. This is where you have had the most success.
Does location matter for your sales? And where are your best customers located? Define yourself as a local, regional, national, or global company by the locations of your best customers. And then you can look for ideal customers grazing nearby.
Once you answer all these questions, compile your information. And then spend some time looking at any other company characteristics relevant to you.
Usually, these are easy to identify based on what your solution does for your customer. However, to find your ideal customer profile, you must look closer. Although you sell to the executive level with higher-level business issues, circle back to operational issues when you verify your value claim.
What operational problems do you solve?
- Increase revenue in a specific sector
- Reduce labor
- Make a particular group more productive
- Cost avoidance
What specific business problems do you solve and what value does your solution create for the ideal customer?
Next, think about a set of reference companies. The team should ask:
- What is the organizational structure? Or does organizational makeup matter?
- If organizational structure matters, where do your best customers fall on a spectrum from simple to complex?
- How many divisions, branches, or locations do they have?
- Are they primarily domestic or international?
- Are they owned by a larger corporation or a parent company or neither?
- Do they make centralized or decentralized decisions?
- Are they first-generation buyers or is this an update of an earlier generation purchase?
- Do you prefer a top-tier or mid-tier solution?
Who is responsible for operations and who are the end-users of your product? And, look for patterns in work processes, labor issues, and equipment usage.
Are there patterns in how customers interact with their external environment? Look at how they sell products to their end customer. Is it by:
- Direct sales?
- Indirect channel?
- Independent dealers?
- Two-step distribution selling to someone who sells to someone else through to the end customer?
How do they interact with suppliers? What types of commitments do they make in terms of your solution?
Next Up: Technology Characteristics and Service Characteristics
Now your profile shows your ideal customer’s company and operational characteristics. It’s a good start. In the next post, you will determine the technology and service characteristics of your best customers.