Andy Bailey, an Entrepreneurs' Organization (EO) member in Nashville, is an author, CEO and head coach of business coaching firm Petra Coach who serves in an advisory role on the Gazelles Council, leaders of the Scale Up movement. We asked Andy why creating an ideal client profile is such a vital component of the sales process. Here's what he shared:
When it comes to building a robust sales pipeline of quality leads, it all starts with having a written, clearly defined ideal customer profile (ICP) of who's buying your product or service. An ICP positions your company for success because it forces business leaders and the sales team to quantify and qualify the key attributes of prospective clients who will benefit the most from your company's products or services.
I've relied heavily on an ICP to accelerate sales at my coaching business, and our ICP was a go-to document when I was building my wireless company, NationLink Wireless. With an ICP, you're taking a more targeted approach to business development rather than "smiling and dialing" in the hope of landing new clients.
As a business coach, I've worked with clients who don't have an ICP or haven't even considered what their "dream client" looks like. Their strategy is either having sales reps generate their own leads or handing reps a list of random prospects. All too often, these opportunities aren't vetted, and reps waste too much time chasing bad leads.
Finding quality leads is vital to sales success, but it's also one of the most frustrating parts of a sales rep's work. HubSpot found that 40 percent of reps say prospecting for leads is the most challenging part of the sales process (closing was next at 36 percent and qualifying at 22 percent). An ICP is a great starting point because it allows you to target prospective clients more effectively and spend less time qualifying leads.
Your ICP is an invaluable sales tool, so take the time to evaluate which prospective clients you need to focus on to maximize your sales efforts.
Here are four critical factors to consider as you develop your ICP:
1. Industry segment/company expertise
Be realistic about the types of businesses you are targeting and what you can do for prospective clients. Review your current list of clients to see where you are providing the most value, generating the most profit and maximizing your internal resources. Look at the reasons why former clients are no longer purchasing your product or service. You'll soon see why your business excels in specific industry verticals and not in others.
2. Revenue and budget
The first thing to consider: Does the prospect have the financial capability to pay for your company's product or services? Revenue is the best place to start because it will help you determine whether the company is large enough to buy your company's solution.
3. Location, location, location
The internet has made it possible for clients halfway around the world to buy your product or service. But don't ignore the importance of face-to-face contact. If travel is a constraint to building a strong relationship with a client or providing quality service, then consider narrowing your geographic focus.
4. Commitment to your solution
Look for prospects who want to improve their companies and who are committed to change. The probability of closing new deals increases when clients are seeking products or services that will make their lives easier. Just as important, ideal clients are more likely to find money in the budget when they are committed to change.
An ideal client profile should be a central component of every company's business development strategy. In addition to focusing your sales reps' efforts, it will aid your marketing team in its effort to generate a higher volume of quality leads and, ultimately, sign on new clients so you can grow your business.