How to Define Your Ideal Prospect
A healthy pipeline helps you meet sales targets. So, will getting an insane number of customers into your pipeline result in success for your team?
Yes and no. Sales teams need healthy pipelines to achieve growth. But chasing anything that moves and cramming everyone into your sales pipeline won’t make it healthy. A large number of prospects who don’t fit your ideal customer profile will jam your pipeline and prevent your team from reaching peak performance.
An excessive number of poorly vetted prospects won’t turn anyone into a sales superstar. However, it will surely frustrate everyone trying to sell something to people who won’t buy anytime soon.
But . . . if all the prospects who do make it to your pipeline already fit an ideal customer profile, then an insane number of them might just turn your company into the next billion-dollar unicorn. That, of course, is a hypothetical statement that starts with “but” and “if.” To be on more solid ground, remember these facts about customers and you’ll have a healthier, more manageable pipeline:
- Customers should be at the core of your sales process.
- However, not all customers are created equal.
- They’re not always right either, contrary to popular belief.
- There’s a wrong type of customer for your business model. More likely, there’s a lot of them.
- Having more of the right types of customers makes your business more profitable.
Here’s how the five points go together:
Determine the ideal customer for your business then focus your company’s time and talent (your most valuable resources) to engage prospects who fit the profile.
And here’s what generally happens to your metrics when you do that:
- Conversion rate improves. This means your team has a higher likelihood of closing deals with your customers.
- Sales velocity speeds up. This means you spend less time bringing customers across all the stages of the sales cycle.
- Sales funnel leakage decreases. This means you have a lower customer attrition rate or the frequency by which prospects opt out of the sales process.
What makes an ideal prospect?
People may need or want your product but that doesn’t make them instant customers. Many teenagers want a Ferrari and may even feel they need one, but the Italian car maker largely ignores this enthusiastic consumer segment in favor of a highly niche market they can do business with. On the other hand, individuals and organizations who are unaware your product or service even exists might eventually turn out as long-term customers.
Clearly, successful businesses rarely — if ever — sell to everyone. And the adage the more the merrier doesn’t always apply. As small business guru Ray Silverstein warned on Entrepreneur: “The bigger your market, the greater the likelihood you’re wasting your time with undesirable prospects.”
The trick then is to find, engage and nourish the best type of customers for your business. That way, you get to channel precious time and talent where they can generate the most value. Otherwise, the opportunity cost on lost deals tends to pile up if you allow mismatched prospects to linger in your pipeline longer than necessary.
So how exactly do you determine your ideal prospect?
For Pipedrive’s Timo Rein, the ideal customer is “one with whom you have the best strategic fit across the board.” This “fit” represents the sweet spot where:
- The product meets the customer’s needs.
- Your team’s sales cycle syncs with the customer’s purchasing behavior.
- Your pricing strategy agrees with the customers budget.
Begin identifying your ideal customer profile by examining historical data, reviewing your metrics and answering several key questions with everyone on your team.
- With which type of customers does your team experience the highest conversion rates? What are the common attributes (size, location, business model, industry, target market, technologies used, etc.) of these customers?
- Which customer needs does your service or product solve best? What type of customers have these needs in common?
- Which type of customers deliver the deals with the highest monetary value?
- How are purchase decisions processed by customers you are most successful at selling with? How long does it take these customers on the average to reach a final decision?
A decent CRM will help you answer these questions. If you are using Pipedrive, then one useful feature you can tap to map your ideal customer profile is the platform’s ability to track won and lost deals. Pulling up the list of lost deals can help you identify the main reasons customers fall by the wayside. Extracting won deals will give you a shortlist of customers your team should start profiling in earnest. Import.io’s Dan Murphy wrote an excellent guide on how to go about this step by step.
Meanwhile, what should a sales team do with prospects who don’t fit their ideal customer profile?
Unless you doubt your ability to find new prospects that do fit the profile, then you have to perform the counterintuitive measure of trimming your pipeline. Based on your sales cycle, you can flush qualified but less-than-ideal prospects into a future pipeline or into a current but deprioritized one. SeamlessDocs, a provider of web-based e-signature and document hosting services, uses Pipedrive to maintain three kinds of pipelines (hot, lukewarm, cold) depending on how close a prospect is to the company’s ideal customer profile.
A fit pipeline is better than a fat one
While sales is largely a numbers game, the notion that more is better doesn’t always ring true. Sure, more prospects generally mean the likelihood of more closed deals, but only when the prospects have been properly vetted. If not, a large number of unqualified leads could divert your company’s limited resources the wrong direction.
A healthy but streamlined pipeline serves as a key to selling success.