When companies create profiles of possible target customers, there is one dimension they often overlook: the urgency of the need for the offer. This article provides a process for segmenting prospective customers in this way and creating a sales strategy.
Many business leaders believe that they fully understand their ideal target customers. They create clear profiles (aka personas) that are very detailed with well-researched parameters, such as standard characteristics (for example, age, education level, years in the company, role) or firmographic (eg, annual revenue, number of employees. , industry, geography, years in business). While those traits are important, they ignore another important trait: urgency of need.
A company that offers a software-as-a-service billing solution for small and mid-sized private dental practices may focus on classic demographics, such as practice size (number of employees or number of dentists), the age of the practice (since older practices are more likely to have outdated systems), or the amount of insurance billing the practice does each year.
These variables are useful in helping to build a list of prospects, but they do not determine which of these dental practices the sales team should call first. If, however, the company adds data that shows which of the needs of these practices are the most urgent – say, those who advertise for the management of billing and claims help more than twice in the last year (suggesting that they are struggling to keep up with billing. ) — Salespeople are able to prioritize their attention on these prospects.
The Four Segments
This needs-based approach involves dividing potential customers into four segments:
- Urgent. The customer recognizes that it has an urgent need. (We have another person who quit!)
- Not urgent. The customer knows the need, but it is not a high priority at this time. (We realize that our billing needs are changing and our current system needs to be updated. We plan to begin reviewing this next year.)
- Currently meeting. The customer believes that it already has an adequate solution to meet the demand at this time but recognizes that this is not a long-term solution. (We have an older billing system in place that still does the trick for now.)
- nothing. The customer does not need or expect such a need at any time. (Our small practice has a limited number of patients who pay out of pocket. Since all payments are made at the time of service, we don’t need a complicated new billing system.)
This focus on the urgency of the target customers’ needs may sound like common sense, but we’ve seen it in our work with B2B companies — from mid-sized companies to the Fortune 50 giants in an array of industries such as financial services, business information technology, utilities, industrial solutions, and healthcare technology — that they often fail to consider this dimension. Here is a process a company can use to use this method.
Identify new customers.
To identify prospects outside of your current customer base, you can use existing information. One is the source we talked about: help wanted ads that show a particular need.
But there are many others. For example, if a company sells inventory management solutions, one source of important data may be industry mergers and acquisitions data, which may reveal companies that have an urgent need for change. -or or integration of systems such as inventory management. If a company sells quality management solutions, a source of valuable data can be companies hammered for poor quality social media.
Gather the necessary information.
Identifying the true urgency of your customers’ needs requires looking beyond your typical demographic and firmographic profiling. It started an outreach initiative to talk to customers and prospects. The purpose is to ask questions to identify new target customer parameters that may affect the urgency of customer needs:
- Failures. How urgent is the need to address these failures? Which frustration would most facilitate success if resolved?
- Goals. Are your goals clear, consistent, reasonable, and measurable? Have your goals changed recently?
- Roadblocks. What is stopping you from achieving your goals? (ie, What keeps you up at night?) How big is the impact of these roadblocks?
- Environmental and situational factors. Have you experienced any industry consolidation, organizational or executive management changes or instability, competitive changes, regulatory changes, etc.? What is the magnitude of the effect of these factors?
- Technological factors. Are there new or changing technologies that will affect your ability to achieve your goals? Are you at risk because of technology end-of-life issues or incompatibility?
Assess your company’s ability to service low-level segments.
Once a company has made its needs-based segmentation effort, it should seek to answer the following questions about each of the four levels. The findings will dictate sales and marketing strategy, investment levels and resource allocations.
Level 1. Urgent need
How quickly can we meet their needs? How can we best serve them? Is the market opportunity large enough to target only these prospective customers? Given the urgency of the customer, how do we price our products to optimize margins without damaging relationships by appearing exploitative?
Level 2. Non-urgent need
Can we convince them that their need is more urgent than they currently believe? How can we effectively stay in touch with them so that we remain top of mind when they understand that their need has become urgent?
Level 3. The need is currently met
Should we abandon these prospects? If so, when and how should we touch base with them to see if their needs have changed? Or is there an opportunity to continue working to convince them that their need is more important than they realize or can be better met? If so, what is the best approach to get them to rethink their current situation and identify their true needs and their urgency?
Level 4. Not necessary
Should we completely remove these contacts as any potential prospects? Is there another need we can meet for them – perhaps with another product? Should we be in touch on a scheduled basis to see if their status has changed? How can we best do that?
Ideal customers are those who clearly understand and recognize that they have an urgent need for your offering. However, if that opportunity is not enough to meet the company’s sales volume target, it may be necessary to expand efforts beyond Level 1. Get the attention of these additional target customers, challenge their insights into their needs, and educate them on how your offering works. benefiting them will require resources. Therefore, a critical assessment is needed to determine if the opportunity is greater than the investment required to meet customers at other levels.
Test your new targets.
Before committing to a complete change in how your salespeople prioritize opportunities, select one or two experienced salespeople to help you test your new target customer parameters. . Identify a few prospects that match your revised target profiles, and see how the selected salespeople are able to penetrate them.
Revise your sales messaging and training.
Include the level of demand of prospective customers in your marketing messaging — the language the sales team uses in its interactions with customers. Revise your sales tools (materials such as brochures, technical papers, and customer testimonials used in the sales process) to include the urgency of the need. And teach salespeople how to read and react to the level of demand of prospective customers and adapt their speech appropriately.
By increasing the urgency of the need to target customer profiles, companies can do more than differentiate their offerings more effectively. They can also identify new growth opportunities and successfully steer clear of slowing or tightening markets. They can facilitate the sale of new products. Last but not least, they can turn poor sales teams into strong performers.
