I wrote this post for B2BBuzz where it appeared 4/15/11.
The idiom to “set your sights on” commonly refers to aiming a gun, getting a target “in your sights” before pulling the trigger. But in terms of your ideal customer, the image of a sextant makes more sense. The sextant is the tool that measures the angle between any two objects in order to locate your own position. So I don’t want to shoot at customers; I want to know where they are and where my company is in relationship to them.
Instead of randomly shooting messages out into the market and waiting for leads to come in, smart companies on a fast-growth path need a way to identify the specific prospective customers that ought to be their best candidates. What if you could make a list of the companies that are best for you to go after instead of simply following up on leads or cold calling?
Three steps will get you there:
1. Determine criteria and metrics.
If you want to do bigger deals, what kind of customers do you need? Where should they be located? What industries do you serve best? Which of your product or service offerings should you focus on to grow the size of customer you can attract?
Bring your cross-functional team together to create a list of criteria that matter to you: customer size, revenue, industry, location, reputation, business structure, need for your services, history of working with companies like yours (or no history of that?) Start by defining your current best clients—what features do they have in common? Are there bigger companies that have many of these same features?
When you think you have the right criteria, assign some metrics to those criteria. For example, if the customer’s revenue is important to you, assign a number or numerical range to the ideal annual revenue size. Are you best with companies that have $50 million in annual revenues? Or hundreds of millions? Or do you fit better with much larger companies? Or smaller ones? Assign your metrics at three levels: High, Middle, Low.
Suppose your absolute ideal is a company between $50 and $100million. Call that “High.” What would be your next best size? Would it be smaller than $50 million or higher than $100 million? How small is too small to matter? How big is too hard to handle? Work through all of your criteria and apply metrics, in each case defining best, second best, and “low as we would go.” So for example your Low metric would not be simply “less than $25 million.” Rather it might be $25 million to $10 million. And if so, you wouldn’t consider a company with less than $10 million in annual revenue even if other metrics looked good.
Don’t kid yourself on the metrics! You’re trying to define the qualities of an ideal customer, one that you would invest resources to land. If something smaller or less desirable comes in over the transom, you can still do the work if it’s good work. But you don’t want to invest much effort in getting that business.
2. Run your criteria through a business database.
Most public libraries and all university libraries will have access to some version of the major business databases: Hoover’s, Lexis Nexis, Business Source Premier. So visit your alma mater, befriend your local librarian, or just search for a library online to get access to free data. Another good place to start is manta.com. Manta’s company data is not as reliable as the others I’ve mentioned, but it will get you going on key facts and is easy to use.
All of these databases will help you find a list of companies that meet certain of your key criteria: company size (in revenue and/or employees), structure (public or private), location, and industry. You can also learn about location of headquarters and satellite offices for larger companies.
3. Research the highest-potential prospects.
Once you have a list of companies that meet some of your criteria, you may need to whittle it down to a manageable size. You are not going to approach all of the companies on your list in the short term. Rather, you are going to pick some to watch and determine when the time is right. So, start out with what look like the top 25—because of their location or their size or their industry, for example. Then learn all you can about them—through their website, the business databases, annual report, SEC filings, social media presence, blogs, and news media. Be sure to include contact information for key executives that you would want to meet.
Start a digital dossier on each of these companies to record your key criteria and key findings. Upload it to a shared space so your team can add more information or changes over time.
Finally, work your own network to find an introduction to one of the key executives that you would want to meet, to introduce your company. I find LinkedIn to be the most productive online resource for that purpose, but you have all of the social media sites at your disposal plus your network of friends, customers, past customers, trade associations, and community groups. Involve all of your team in finding a warm introduction: someone will know someone who knows someone. You will be surprised.
So instead of handing out tchotchkes to whomever shows up at another trade show, set your sights on your ideal customer and go after that one.