The Wrong Customers Waste Time, Money and Energy
New salespeople are so eager to show a robust pipeline and close deals that they often find themselves chasing the wrong customers. They mistakenly make pitches to anyone who will listen. The result? In a recent Selling Power survey of B2B sales leaders, only:
The Right Customers Drive Profitable Growth
Conversely, high performing sales reps ruthlessly focus on target customers who fit their ideal client target profile where they know they will win the majority of the time. High performing sales teams have evidence-based product-market fit – ideally in the form of real customer demand. They focus exclusively on solving problems that are painful enough for their target customers to be willing to replace existing and often comfortable alternatives.
Ideal target client profiles are also known as ideal target buyer profiles or ideal target customer profiles. Regardless of what you call them, do you know what percent of your existing pipeline deals fit your ideal target client profile?
You should. Sales teams with clearly defined buyer profiles and clearly defined target markets outperform sales teams that do not by 24% to 44%.
The Definition of Bad Customers
Customers that are difficult to work with, who don’t fully need or value what you sell, who are overly concerned with price, or who are at odds with your culture, are just bad investments. They are costly in terms of your time, your resources, and your energy. And they are rarely satisfied.
Three Things Ideal Target Customers Do
Ideal target clients:
These ideal target customer profiles are important because it means that your ideal clients are comparatively inexpensive to acquire and serve, are frequent and large buyers, and appreciate and promote your value proposition.
Total Addressable Market (TAM)
Your total addressable market (TAM) is defined by the maximum potential revenue you could generate from the market that you are going after. Though your total addressable market (TAM) might be pretty large, even the world’s most powerful companies (i.e. Amazon, Apple, Google, etc.) do not own 100% of their total addressable markets.
High performers ruthlessly narrow their focus to their ideal target customers where they should win the majority of the time. Strategically, they also ensure that the market is not too saturated and that they can defend their market position against increased competition over time.
Define Your Ideal Target Customer Profile
The best solution sellers do not waste time chasing the wrong customers. They know what makes for a good client and how to win their trust. Just as every company’s strategy and culture is unique, the same is true for defining your ideal customer. It is well worth defining your ideal target client profile where you should win the majority of the time.
Six Areas to Get Right So You Stop Chasing the Wrong Customers
If you want to stop chasing the wrong customers, make sure that you and your team agree upon the following six areas regarding your target clients:
The Bottom Line
Customers who best fit you and your business create repeat business, provide referrals, and supply testimonials to help grow your top line. Top solution sellers avoid bad customers who waste time, energy and money. Smart solution sellers put a red light on chasing the wrong customers who have little need, inclination, or means to buy.
To learn more about how to avoid chasing the wrong customers, download 4 Steps to Ideal Target Client Definition
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