For many companies that sell products or services to other businesses, finding a way to increase revenue is the number one problem. A successful business-to-business marketing effort can be the key, yet surprisingly few marketing plans are based on hard factual information. Even marketers may not know where to start. If this sounds familiar, read on.
Before you spend another day or another dollar pursuing new business, think about whose business you should pursue. With a little research and analysis, you can focus your marketing efforts to make a greater difference. Here’s how:
1) Study your current customers.
Create a profile of the kind of customer who already buys what you have to sell. Once you know more about the customers who recognize the value in your products or services, you will be better prepared to find more of them.
A useful customer profile answers these questions:
- What are the common characteristics of our customers?
- What industry segments are they from?
- Are our customers similar in size, growth rate, geography, or buying influencers?
- How do our buyers like to receive information?
Results from more than 2,000 lead-generation programs show that most customers are more alike than not. This isn’t obvious at first. But once you compare profiles of your existing customers, the similarities will begin to show.
You can gather customer profile information through telemarketing, direct mail, e-mail and Web surveys. I’ve found that telemarketing can be a particularly quick, effective way to collect this information; a skilled caller can gather a wealth of information through brief conversations with decision makers.
When you have a comprehensive customer profile, start matching it to new prospects.
2) Look for other companies that share characteristics with those in your customer profile and concentrate your sales, marketing and lead-generation efforts on them.
Companies and contacts that are similar to your customers often are good prospects for your products or services.
Let me tell you a story to illustrate this point: Once upon a time, in the land of business-to-business marketing, there was a small, unhappy company. Of main concern to the CEO of the company was that revenue was down and sales force turnover was high. This was particularly alarming because this year marked the highest marketing spending in the company’s history. In short, the CEO saw that the company seemed to be spending more but making less.
When sales and marketing were brought together for problem solving, the meetings turned into finger-pointing sessions with the sales department blaming marketing for poor lead quality and marketing blaming sales for lack of follow up and low closure of leads. In addition, the vice president of sales suggested that the marketing vice president be fired and the vice president of marketing suggested that the vice president of sales be fired. Also, the company’s board of directors was increasingly questioning the CEO regarding the lack of growth. The CEO knew that something must change.
The CEO decided to bring in a lead-generation “expert.” After listening to the CEO and meeting with the vice presidents of sales and marketing, the lead-generation expert suggested that success lay with the development of a lead-generation system. The first step was to gain an understanding of the company’s target market. The lead-generation expert said that the problem was fixable by a) developing an effective customer profile and b) implementing a disciplined lead-generation process. The lead-generation expert went on to say that it was even possible to get better results with less spending.
The CEO said, “Have at it.” So the expert got started.
The lead-generation expert first investigated the company’s “old way” of doing things. He discovered that the company believed its target market consisted of 120,000 companies. This information was culled from a list compiled by the sales force. It was based on things such as trade show attendance and cold calling.
The company tried direct marketing to the 120,000 prospects. This generated about 1,300 inquiries. The sales force closed 56 leads—a closure rate of 4 percent. The sales force was “burned out” following up on low-value leads. In fact, one senior salesperson said that only one in 10 leads had any value. He had, in fact, stopped following up on any leads that the direct marketing effort generated.
The expert was determined to teach the unhappy company a better way. He convinced the CEO to allow him to build a profile of the company’s existing customers as the basis for more effective marketing planning.
The analysis indicated that the company’s customers fit a narrow profile. They could be defined by SIC code, revenue, decision maker title/function, preferred communication means, and growth rate. The wise expert then matched this profile against the 12.4 million U.S. companies listed by Dun and Bradstreet and found nearly 1,900 companies that matched the profile of existing companies.
With this information in hand, the expert met with the CEO and suggested that the company focus its efforts on the 1,900 “sweet-spot” companies using a closed-loop inquiry management process. The CEO adopted the expert’s recommendation, and after one year…
- Sales doubled
- The sales-lead closure rate increased to 40 percent
- Sales-force turnover decreased as commissions increased
- The internal marketing and sales departments’ relationships improved
The lead-generation expert only smiled. Well, that is not completely true. He collected a fee for his effort, so everyone was happy.
So follow the lead-generation expert’s advice and improve your company’s sales and revenues.
Ed Herzog is president and chief executive officer of Performark, Inc., a business-to-business lead generation and management company in Bloomington, Minnesota. Ed can be reached at 952-946-7337 or eherzog@performark.com
