It may sound obvious, but you’d be surprised how many companies don’t put quality time into winning the type of customer that will help them grow. However, if you are able to identify and then find your ideal customer, you can implement a strategy that will deliver growth for years and relieve pressure from your sales environment.
What is fuelling the stress and pressure?
Businesses tend to have small windows within which to deliver growth outcomes. These can vary from only a quarter in some environments (for example a Wall Street listed SaaS provider) to 12 months when measuring across a financial year. Sometimes Sales Leaders have shorter windows depending on the attitudes of the wider business, private owners or shareholders.
A natural response to this regular drumbeat of growth pressure is short-term thinking. Sales Leaders often throw headcount at the growth problem (which in itself increases the cost base of the business adding more pressure), depend on tactics rather than joined-up strategy to win customers and undertake desperate measures, such as “offers” or “giveaways” which can dilute the value and credibility of the company.
This is true of both scale-ups trying to push on beyond that natural start-up growth spike and Corporates looking to protect and defend revenues in the face of growing competition. Big teams are created trying to win everyone and huge amounts are spent on technology investments designed to spread the word to 1,000s of target prospects. More stress, more to manage but growth is no more likely, especially as this way of working is not particularly stand out or unique. As a Sales Leader you’re probably stuck in a sea of data, obsessing over funnels, experiencing diminishing enjoyment and wishing there was another way.
So take a breath and let’s solve this together.
We Need to Find Your Ideal Customer
What? We’re already doing that, we have Ideal Customer Profiles (ICPs), we always discuss this with Marketing, we have vertically aligned sales teams taking tailored messages to each market. That can’t be the answer! This may be true for some companies but it is sadly rarely the case that ICPs are actually Ideal Customers or that they are tied into growth plans to make a real difference.
In scale-ups it can be common to have a hero customer, that first big win, representing great chunks of company income, but activity is focussed on general customer acquisition, so instead of winning more heroes and growing, the hero becomes a business dependency and a huge risk should they take their business elsewhere. So, let’s look at how to identify an Ideal Customer and then how we get to stress-free growth.
Identifying Your Ideal Customer
There are four steps to follow. Step four is critical but you must follow them in order or stress-free growth won’t come. Don’t skip any.
Step 1: Map out your true USPs (Unique Selling Points)
List out your USPs in front of you. Think about all the things that make your company, service and product great. Now go back through the list and eliminate everything that is not unique to your organisation. A true USP list may have one or two elements actually linked to your product or service (unless you are genuinely the only provider of your thing on earth) but will typically reflect differences in behaviour or approach to market. It should be a short list that reflects the magic DNA that is why your customers love you. You may find that your USPs only apply in certain markets, that is fine too. What makes you great won’t translate to all sectors equally and we don’t need it to.
Step 2: List out the Customers you have that buy because of these USPs.
These will be your existing customer tribe. Your evangelists, the people that positively relish your magic DNA. You’ll know them because they’ll be great to deal with. You’ll naturally understand the difference you are making to their problems. They could be that hero customer but don’t get pulled into that trap, your hero customer may be just a large revenue contributor not an Ideal Customer. Think about how each customer makes you feel and how easy it is to deliver for them. Ask yourself, why do they buy from us? If the answer isn’t on your USP list they don’t count. The two must match. Got your list? OK step three.
Step 3: List out the attributes of these Customers.
Their attributes will be specific to them (location, company size, industry, contact role), specific to the service they purchase (they may exclusively invest in service X or purchase widget Y) or specific to how your relationship with them operates (they are easy to service, business is frictionless, they use your contract terms, they give references, they are not a time-drainer). Do these for each customer on your shortlist. One column for them, one for the purchased service and one for operations. Once you have done this for each customer eliminate any customer with negative attributes that represent a challenge you don’t need (for example they may be an evangelist but operate in a market that is a real stretch for you).
Step 4: Link this back to Revenue
By now you should have a short list of Customers that buy from you because of the things your company is naturally good at and a short list of common attributes you regard as positive. Done correctly you should look at the list and wish your entire customer base looked like them. Now we need to apply the key ingredient, revenue.
List the annual revenue number (or equivalent to how you report revenue) against each customer on your list. Broadly categorise these into four bands. You can use whichever terminology suits your culture but for now let’s say Big, Medium, Small, Tiny to avoid corporate speak. You’ll need to decide where the divide between each band is for you. In broad terms:
Big – Significant customer, maybe even that hero customer – a seriously exciting prize
Medium – Your sweet spot customer, good revenue contributor but easier to acquire than a Big customer
Small – Your minimum acceptable customer size for the balance of effort to win them
Tiny – You’d have to win too many of these in a year to achieve your numbers
Put a line through everyone on the Tiny list. These are not ideal customers. You should now have a list of Big, Medium and Small customers categorised by revenue that you’d be happy for yourself and your teams to spend time winning. In short, your Ideal Customer.
Now, let’s turn this Ideal Customer into Stress-Free Growth
Take your revenue target for the year and deduct your truly safe run rate business. Your target may be £1m, your safe run rate £600k so you have a delta of £400k to win. Now take this £400k and work out how many Big, Medium and Small customers it would take to do so. Be realistic and be sure to apply sensible sales cycle lengths to this exercise. Repeat for the next year’s growth goal and so on. You will end up with a model that says “this year we only need to win six medium customers and ten small customers to achieve our number” or “if we win two new big customers a year for the next three years we’ll achieve our growth target from the investors” or similar. One business owner I helped recently worked out they only need to win seven new customers a year to more than double company revenues!
This suddenly feels very different to the stressful growth building you may have been doing. Now we can align everyone behind a different approach focussed on winning specific quantities of ideal customers and magic can happen.
Found Your Ideal Customer? Then get ready to enjoy these things.
Easier Decision Making
Now you know that the only plan is to win and nurture customers from our list, day to day decisions get easier. You will sweat the details less, worry less about customers not on your list, be able to focus your efforts on a clear strategy and have the peace of mind that all activity is supporting growth.
Greater company alignment
Your whole company can now start telling the same stories. Your marketing team only need to share stories that speak to your Ideal Customer not burn hours generating generic material. Discussions from board down to practitioner level can focus on acquisition of Ideal Customers and improving plans to do so. Everyone gets narrow and deep on the task at hand rather than burning mental energy on conflicting priorities.
Customers become easier find
Ideal customers know other ideal customers as they tend to be in similar communities. They can introduce you, issue referrals and case studies and help you find more. Your team can spend more time “hanging out” where your ideal customers spend their time, whether in digital communities or at physical events. Networking becomes focussed, content creation and lead magnets become tailored and more people from your tribe will find you.
You’ll spend less
You’ll need less tech to manage huge funnels, suffer less cost managing difficult customers and find organic growth less challenging. A joyous by-product of this is you’ll also spend less time “in the tech” giving you more time to spend nurturing customer relationships.
Recruitment becomes easier
You should be able to recruit positively, with sales team expansion only as a result of growth not to try and generate it. Imagine every hire being laser focussed on your ideal customer communities from Customer Success to Enterprise teams. You could hire subject matter experts that really foster trust in your ideal customer community. You’d become an unstoppable force within your market. Your team churn will reduce through improved motivation and fulfilment, breaking classic sales hire cycles of hire, churn, repeat.
The stress will fade and you’ll start having fun
Going back to our original headline, growth will be natural and stress-free. Hopefully this doesn’t seem too good to be true. I’ve genuinely seen this happen. Of course it can take energy and work to align the business and achieve buy-in, but stay the course and the rewards are well worth it. If you need a hand, I’m here!
Identifying and winning ideal customers is a component of The Humble Sale Playbook, our sales performance system designed to help Sales Leaders and their teams win.
