The foundation of all B2B lead generation strategies, regardless of the activities you choose to use, is your target market. If you get it wrong, no matter how big your budget, great your content, or how much you pummel it, the results will not fill your sales funnel and will leave you mighty disgruntled. You can blame today’s environment, an inept sales team, and even your lead generation system but if you don’t step all the way back and take a hard look at who you’re targeting, you may be missing the real issue.
How to Choose the Right Target Market
When we are working with clients, I always look at three versions of target markets.
1. Your Sweet Spot
This is the market that mirrors your ideal customer. If every new client could be like these accounts, you and all your staff would be thrilled. Business would be rolling in. Client sat would be at an all-time high. You’d sleep well at night.
Often you can recite off the top of your head who your sweet spot target market it. You describe them as:
- Your most profitable clients
- The most fun to work with
- The happiest, most satisfied
- Common characteristics
Everybody wants clients like that, but you can’t develop a list or a lead generation strategy around those qualification points! Still, your goal is to choose the right market with the highest potential of finding prospects that model them. Examine your current clients and look for common characteristics such as:
- Key contact
- Be selective
These criteria become the foundation for your target market. If a company doesn’t fit, you shouldn’t be developing lead generation strategies for it. You will attract the wrong leads and ultimately, the wrong clients. Be more selective.
2. Your Aspirational Market
Target markets aren’t static. As your company grows and evolves, you add or change your focus. Aspirational target markets are those you aspire to enter, but for whatever reason, may not yet be ready.
Typically, aspirational markets are:
Industries you have limited or no experience in as yet
Larger or smaller companies than you have worked with in the past
When to Add an Aspirational Target Market
Your lead generation goal is to add new leads to the sales funnel. If it’s not growing, you get mighty frustrated. Because aspirational target markets are those you usually don’t have experience with, it will take time to nurture and grab their attention and your sell cycle may be longer.
Wait until you have a consistently producing B2B lead generation system with a healthy sales funnel to add an aspiration target market. This will give you time to develop the market without frustration.
3. The Bad Apples
In my Channele2e cold calling article 3 Smart Cold Calling Strategies to Reach Prospects a reader commented that “sometimes figuring out who not to sell to has the biggest impact on improving sales.” This fundamental sales tenant is often overlooked by sales, marketing, owners, and executives in their quest for increased revenue.
“Just sell. We can support anyone. Your goal is to just sell more,” they proclaim.
How Do You Know if Your Target Market is Clearly Defined?
Take a step back and review the leads in the sales pipeline to see if your sales and marketing team got it right. If you have a target market you’ve been nurturing, but you’re not sure it’s the right one, use the strategies to validate it.
Questions to Test Your Target Market Definition
When you discover that the new business development sales reps are closing the wrong size, wrong industry or wrong solutions, they didn’t get it right.
When new sales opportunities entering the sales funnel are not what you want to sell, they didn’t get it right.
When you see lead generation strategies pulling in leads from the wrong types of companies, or for the wrong types of opportunities, they didn’t get it right.
If your sales and marketing team didn’t get it right in all three cases, it’s time to more clearly define your ideal target market.
Tips for Choosing Your Target Market
Your target market isn’t designed to limit what you sell or who you sell to. It’s designed to help you get very focused in your sales, marketing, and service delivery. Here are four additional tips.
Your target market doesn’t have to be an industry vertical. You can select a cross-industry target market.
It’s doesn’t have to be one market. You can have multiple ideal target markets, especially if you are a larger company. One client of ours has one cross-industry segment and within it, 4 industry verticals. Another has two cross-industry segments of different sizes.
Your target market does have to fit your solutions and the needs your solutions address. Whatever target market you choose, it has to align with the value you are selling and your differentiation.
If your target market has been hit especially hard this year, you may need to shift markets, at least for the time being. This post has 3 ways to change target markets when your current one is not working: How to Shift Target Markets in These Uncertain Times.
Get Specific and Reduce Your Cost of Sales
As you select your target markets, be specific. The clearer you can be, the easier it is for your whole team to know who they want to do business with, and even more importantly, with whom they do not want to do business.
If we are working with you to do your lead generation for you, or you are doing it yourself, you will implement lead generation strategies and campaigns targeting the right type of companies and the correct personas.
The quality of leads will increase as leads you receive better fit the profile of your sweet spot target market.
Sales reps will disqualify contacts who aren’t a good fit, saving valuable time selling to the wrong prospect. As they’re gathering requirements, knowing who the ideal customer is helps salespeople ask more effective requirements gathering questions. Sales proposals they create will more accurately reflect the needs of the prospect and the solutions you want to sell.
Your cost of sales will decrease significantly.
Revenue objectives rise in an attempt to motivate sales and marketing teams to uncover more leads and sell more of their stuff. But at the end of each quarter, revenue has risen only slightly. New account acquisition is flat.
The cause may not be that your sales reps are lazy prospectors. Rather, it could very well be that they are trying too hard – with the wrong prospects.
When you haven’t clearly defined who your ideal target market, you leave it up to your sales and marketing staff to figure it out on their own. And they may not get it right.
Identify Who You Don’t Want to Sell To
Clearly identify target markets you will not market to or engage. Remove them from your lists and update your B2B lead generation system to exclude them.