To my vast frustration, I somehow managed to lose my notes of that conversation. Argh!!! But this morning I discovered those notes buried in an archive folder. Yay!!! I can now share with you some of the wisdom Tracy shared with me.
Let's start with something basic: how to find the kind of customers most likely to buy. Most companies today think they can discover new customers through data mining and analysis. And there's no question those tools can be valuable.
However, the real key to finding new customers is the process of self-discovery about who you are and who you can really help. Tracy shared with me a four step process to accomplish this essential activity. Here's my take on what he said:
1. Identify your ideal customer.
Most sellers have a pretty good idea of what kind of company needs their products or services. That's a start. What's more important, though, is identifying the individual in those companies who will feel better after that company buys those products or services.
Because spending money always involves prioritizing, deciding what and when to buy is primarily an emotional, rather than an intellectual, decision. Therefore, your ideal customers are people for whom buying your offering creates the greatest improvement in the way they feel about themselves and their job.
For example, suppose you're selling an inventory control system to a potential customer whose manufacturing facility is sometimes idle do to a lack of parts. The CMO views these idle periods as morale boosters for his team; the CFO is awake at night worried about profitability.
In this case, your ideal customer is the CFO, not the CMO.
To zero in on your ideal customer, you answer the following questions:
- What is the specific benefit or improvement in our customers' lives that takes place as a result of their use of our product or service?
- How will they feel differently because they are using it?
- Who is most likely to experience these positive feelings?
- What is their income, position, experience and level of authority?
Once again, your ideal customer is not necessarily the one who needs your offering the most, but the one who will get the most emotional benefit from buying.
2. Position your offering.
Once you've got a solid idea of who's likely to be your natural ally when it comes to buying what you're offering, it's time to consider what's unique about your company. This is important because unless you've got something unique to offer, your ideal customer might easily purchase a similar product elsewhere.
To create your "market differentiation" (as it's sometimes called), you answer the following questions:
- What is it that you do that's better than any other company?
- Why should your ideal customer buy from you rather than the competition?
- If your competitors were asked (and answered honestly) what would they say that your company does better than anyone else?
The good news is that answering these questions will make it much easier to sell your products or services. The bad news is that if you can't answer them or your answers are lame (e.g. "we're third-generation"), you'll eventually go out of business or become a commodity (i.e. low margin, low price) supplier.
3. Winnow down your prospect list.
Taking what you've learned in steps one and two, mercilessly winnow your list of prospects to those who truly are the best match for your products or services. There's only one key question here:
- What is the subset of my ideal customers who would value and appreciate what my company does better than our competitors?
Don't make the mistake of thinking that sales success comes from a broad focus on many customers. The tighter your target, the more likely it is that you'll make a sale.
4. Discover the most likely buyers.
Don't waste time attempting to develop opportunities that lie outside the list you created in step three. Put all your energy and focus on those few customers who can benefit the most from your company's products or services.
You already know that those customer want your offerings and need your offerings. You already know that they're predisposed to buy from you rather than the competition. Your next step is to contact them and find out, through a conversation, two final points:
- Can they afford to buy?
- If they buy, will they be successful using our product or service?
If the answer to both of these questions is "Yes," then everything is green lights. Unless you do something really stupid, you'll probably make the sale. However, if the answer to either of these question is "no," your better moving on to the next prospect.
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