Most early stage companies chase anyone with money. However, if you truly want to scale you need to learn how to say ‘no’ to a lot more prospects.
People who to scale their businesses are not just looking for 10 to 15 percent growth a year. They want to grow 50 to 100 percent a year or more. While this kind of growth is not easy, it’s very doable for many businesses. The challenge is that if they want to grow at these rates, they need to change the way they do things. And that change can be tough.
One of the toughest changes they need to make is who they prospect and sell to. Typically, most businesses with one to 10 million dollars in revenues use chameleon selling. This is where they hunt for leads and then customize and adjust their products and services to the needs of whatever prospects they find. While you can build a good business this way, you won’t build a scalable business.
In order to grow systematically, you need to focus on a small, limited set of products and services that serve the needs of a target set of customers. This is the only way you can hone your processes proficiently, find talent efficiently, and train your people effectively, and consistently deliver a quality product or service.
When working with companies who want to scale, we should typically start by defining their ideal customer by looking at past customers and finding companies who have been profitable, easy to serve, and promoters for the business.
Once we have a good set of example ideal customers, we can ask a series of questions that define our ideal target customer. Any prospect who doesn’t fit this profile should be de-prioritized in the funnel, regardless of how attractive they look.
1. How would you pick your ideal customer out of a crowd?
The first thing we look at is demographics. What does your ideal customer look like externally. What car do they drive, what school did they go to, how big is there business, in what industry are they, or in what geography are they located? These are things we find in industry reports or through some good Google searching.
This information helps us figure out where we can find these targets and what strategies might work best in terms of prospecting and finding leads. The better we do this and the more refined the demographic description, the easier it is to find a productive channel.
2. What’s happening in your ideal customer’s head?
The second thing we look at are the psychographic attributes of these core customers. These are their values, concerns, priorities, tendencies, and habits. It tells us how they think and what’s going on in their heads. With a good psychographic profile, we can understand what will get their attention, what they are concerned about, and how they make decisions.
This tells us how to best sell to them and how to position our products and services to meet their needs. It will influence everything from types and style of imagery we use in our advertising to the tone and language of the copy we use in our communications.
3. When is the best time to approach your ideal customer and with what offer?
Finally, we want to ask ourselves what triggered the sale or beginning of the engagement. Using our example core customers, we look at what prompted them to start a conversation with us that led to a closed deal. This can be an internal event that occurred- hiring an employee, or moving offices. It could also be external events such as a new regulation going into effect, the introduction of a new competitor, the change in industry technology, or a change in the economy.
These events tell you when you need to communicate with you prospect. Too early and you’re jumping the gun. Too late and you’ve missed the boat. Getting this right will increase the impact of your message and greatly improve the efficiency of your selling.
It’s also important to map and understand any lags or delays that happen between these events at the beginning of a sales conversation. Knowing that your core customer typically searches for your solutions six months before or three weeks after an event is important for the timing of your messaging. By clearing defining your core customer in specific terms, you’ll be able to be more strategic and efficient with your selling process. Even better is that you’ll streamline your delivery and operations management since you’ll be focusing on just a few products and services rather then customizing your solution for each customer.