You can use a broad sales strategy that targets a broad set of potential customers or one that is narrow and is focused on a specific segment or niche.
Both strategies have their pros and cons and the decision to deploy one strategy or the other is based on many, many factors including the type of product, the type of industry, the type of sale (B2B or B2C), the type of customer, the buying process, the buyer’s journey, cyclicity of the purchase decision, etc, etc.
In this article, we won’t be comparing these strategies or discussing how to select one or the other.
Instead, we’ll focus on how to implement Sales Targeting in a business.
With that in mind, here are the topics we will cover:
- What is Sales Targeting?
- Why is Sales Targeting important?
- 7 Steps for precise Sales Targeting
- Using targeted selling to improve all aspects of your business
- Key Takeaways
- Suggested Reading
What is Sales Targeting?
Sales Targeting is the practice of using highly customized sales actions to precisely target those Leads which are most likely to convert into customers in the near term.
Why is Sales Targeting important?
Very simply put, Sales Targeting reduces waste! It reduces waste of time, waste of money, and waste of opportunities.
With proper Sales Targeting you will invest time, money, energy, and resources only into those prospects, leads, opportunities which show the greatest likelihood of turning into customers.
Targeted selling will give you these tangible benefits:
- Better Return on your marketing investments
This one’s simple. You will not waste money advertising, promoting, communicating to those who are never going to buy your product.
2. Better Return on your sales investments
If you decide to focus only on those Leads most likely to convert, you will need a smaller sales team than if you focus on a broader set of potential customers.
Equally important, your sales overheads (business trips, meals, entertainment, etc) will also be lower because of your narrower focus.
In short, the amount you invest per deal will be lower giving you a better return on this investment.
3. Improved Cash Flow Management
With targeted selling, you will have a better understanding of which products are most likely to sell and by when. And therefore, by when the corresponding customer payments will be collected.
Armed with this information you can time the purchases of raw material, components, parts, or products precisely when you need them. This way you have money “locked-in” for the least amount of time.
Both these actions will help increase your business’s free cash flow.
4. Higher Sales Conversion Rates
Because you will focus on those Leads most likely to convert in the short term, your sales team will naturally have a higher conversion rate. Yes, they will start with a smaller pool of Leads but these will be highly qualified leads and so will give a better closing rate.
5. Higher earnings, satisfaction and retention of the Sales Team
Targeted selling will mean more sales in less time and higher commissions for the sales team. And this is always the best recipe for job satisfaction and higher retention of a sales team.
And now let’s discuss exactly how you can implement Sales Targeting in your business.
7 Steps for precise Sales Targeting
Here are the 7 Steps with which you can implement Sales Targeting.
- Segment your market
- Develop Buyer Personas
- Confirm Product-Market fit
- Define Targeting criteria
- Launch Lead generation campaigns
- Filter & Score Incoming Leads
- Execute targeted sales actions
1. Segment your market
Sales Targeting requires you to know who your customer is before finding ways to reach them with a product that addresses their need.
Now, just as important as it is to know who your customer is it is equally important (maybe even more so) to know who isn’t your customer.
This is where Market Segmentation comes in.
You know your market the best and so you will know how best to segment it. But the variables for segmentation that you could consider are age, male/female, income, spending ability, location, buying preferences, habits, etc.
If you’re in B2B sales you could consider segmenting potential customers based on revenue, location, budgets, future plans, etc.
We’re sure you already know the benefits of segmentation and so we will not cover them in this article.
Just, remember that, when it comes to Sales Targeting, the goal of segmentation is not to market to every segment.
In fact, it’s quite the contrary.
To be good at targeted selling, we must market only to a few carefully selected segments.
Now, which segments to target and which to ignore, that’s your call.
You may choose a segment based on its revenue potential or its profit potential or because your product can serve that segment better than others or because you are most knowledgeable about that segment.
There can be many reasons to choose (or ignore) a segment. Finally, it’ll come down to your strategic business objectives.
Once you know which segments you plan to target, it’ll be time to develop buyer personas.
2. Develop Buyer Personas
A buyer persona is an abstract description of one of your customers. It could represent your image of an ideal customer but doesn’t need to. It could also be based on a real customer you know.
Just remember that you should define enough buyer personas to cover most of every market segment you intend to sell into. You don’t want to miss marketing to a significant portion of your segment by forgetting an important type of buyer.
Buyer Personas could include the following characteristics:
- Personal background: Age, family situation, where they live, etc.
- Financial situation: This should tell you how much your buyer earns and what their ability to spend is. It should tell you if there is financial pressure or if there is free cash for discretionary spending.
- Lifestyle: How does your buyer live, spend time with family, go on vacations, etc.
- Hopes / Ambitions: Does you buyer dream of something? Starting their own business? Buying a boat? Working from home? Balancing family and work?
- Pain Points: These should be the ones you intend to solve with your product or service.
and many more …
If you need help creating buyer personas for your business, companies like Semrush, Hootsuite, and Hubspot have written excellent articles on the topic. You can find links to these in the Suggested Reading section at the end of this article.
We will now move on to the Product-Market fit.
3. Confirm Product-Market fit
Once you have chosen the few segments to target and have defined the buyer personas for these segments, next you have to make sure that your product will, in fact, solve the pain points of each buyer as defined in their personas.
This is Customer Value Creation and one of the most important functions of marketing.
At this stage if you discover that your product does not solve the buyer’s pain points and deliver satisfaction, you have three choices:
- Build a new product or modify your existing product so that it solves the buyer’s pain point.
- Drop that buyer from your marketing strategy and focus on other buyers in that segment (assuming this is even feasible)
- Drop the entire segment altogether and focus on a new segment.
You need to iteratively execute these first three steps until you have:
- clearly identified the segment you intend to target,
- developed buyer personas for that segment and
- manufactured or acquired a product that can satisfy the client’s need or solve their pain point and deliver satisfaction to them.
Once you’re ready with these three things, you can define the criteria for targeting incoming leads from your marketing campaigns. That’s Step 4.
4. Define Targeting criteria
Step 4 is where Segmentation leads to Targeting.
Up until now, you’ve segmented the market, developed the buyer personas for your target segments and you have a product that you’re sure fits the needs of the buyers in these segments.
But that doesn’t mean every potential buyer in this segment is going to buy your product. Some will and some won’t.
So how can you get a sense of which one of these potential buyers will become actual buyers and which ones won’t?
It is crucial to know this as early in the sales process as possible to avoid wasting time chasing dead ends.
So many salespeople spend so much time chasing leads who are never going to convert into paying customers even though they perfectly fit the description of a buyer persona.
You need your sales team to focus on leads that are going to close in the near term. All long-term opportunities need to be sent back to the Marketing team for nurturing until they are ready to buy.
So, in Step 4 you need to define the filters you will apply to every incoming lead to decide whether or not you should invest in that lead and try and close it.
These filters could be based on your original segmentation from Step 1 but by applying a narrower focus.
For instance, let’s say that one of your marketing campaigns targets women between the ages of 20 and 60. This campaign will generate leads. But do you treat all leads equally? No, you don’t have to.
You may know from experience that women between 40-60 years make purchase decisions faster than women between 20 and 40 years of age.
And so, you may choose to invest more in women between 40-60 years compared to those between 20-40 years. You may even have different incentive programs for the two buckets. You may assign different sales teams to each bucket.
So, in Step 4 you should define the criteria or filters you will apply to incoming leads so that you invest the most in those leads which are most likely to convert into paying customers in the near term.
5. Launch Lead Generation campaigns
Once you know your target segments, what kind of buyers to attract, which products to promote, and what filters to apply to incoming leads, it’s time to launch the marketing campaigns which will generate those leads.
Marketing campaigns can take many forms. At the basic level, we can classify them as digital and non-digital.
Non-digital campaigns could include print advertising, trade shows, word-of-mouth, referral, events, billboard ads, direct mail, telemarketing, live demonstrations, etc.
Digital campaigns could include Content Marketing, Social Media Marketing, Email Marketing, Online ads, Webinars, etc.
Each of these campaigns will have a call to action which will allow interested potential customers to contact you. This will give you Leads on which you can apply the targeting filters we talked about in the previous Step to decide which leads you should invest in the most.
6. Filter & Score Incoming Leads
By applying the targeting filters you’ve defined in Step 4, you will categorize incoming Leads into different buckets.
At this point, you can give a Score to each bucket based on the likelihood that the Leads in that bucket will close in the near term.
For each bucket, you can then define a precise set of actions to convert the Leads in that bucket into paying customers.
For instance, you may notice that Leads that are close to making a purchase decision exhibit last-minute hesitancy. For such Leads, you may have an incentive program to nudge them over the edge and sign the contract.
Similarly, Leads that are a bit further away from the purchase decision may all raise similar objections. You could create a video or host a webinar inviting such leads to a discussion where you handle their objections. In this way, you can create highly targeted sales actions that address the precise roadblock which is preventing a potential customer from moving to the next step in the buying journey.
7. Execute targeted sales actions
In Step 7 your sales team executes targeted sales actions separately for each bucket of Leads.
For each bucket, there could be a series of sales actions that a sales rep could choose from. Or you could prescribe a certain sequence of actions that are most likely to convert the Lead into a customer.
Often these actions need to be executed in iterative loops till each Lead in the pipeline either becomes a customer or is actively handed back to marketing for further nurturing.
Each of these actions is highly targeted and based on the nature of your business could be specifically defined for a handful of Leads or even just a single Lead. For instance, in B2B transactions where deal sizes can be substantial, it is not uncommon to define a sequence of sales actions specifically for a single deal with a single potential customer.
Using targeted selling to improve all aspects of your business
The processes and experience of implementing targeted selling include a treasure trove of data and information which can help every aspect of your business. Let’s look at some of the more important areas.
Marketing
- As you can imagine, your marketing strategies are going to be way more efficient if they are focused on the point of greatest impact. If nothing else, this will give you a better return on your marketing investment.
2. By implementing target selling you will have greater insights into your potential customers. The process of developing the buyer personas will help you understand your customer much better.
3. By deciding which segments to pursue and which to ignore you will be in a better position to identify gaps in your product portfolio. With this knowledge, you can decide which new products to introduce in the coming years.
4. The Lead Generation Campaigns (Step 5) and the Targeted Sales Actions (Step 7) are going to give you a ton of valuable information about how potential customers are reacting to your communication messages, to incentive schemes, to pricing, to calls to action, etc.
R&D and Manufacturing
- Direct information from sales pipelines about which products are most likely to sell in the near term can help your manufacturing units to prepare to manufacture those products in the required quantities.
2. Targeted selling can be an opportunity to involve customers in the manufacturing process. This can especially be the case in B2B sales where a potential customer can be invited to the factory to see how products are manufactured.
3. Targeted selling involves more discussions with fewer potential customers who are most likely to buy. These discussions can be very in-depth and can be an opportunity to better understand how the customer intends to use the product. This in turn can help R&D and design teams to improve product design, add new features and even look for new suppliers for raw materials, components and parts.
Inventory Management
- The primary objective of inventory management is to ensure that there is enough product on hand to meet sales demand.
Of course, inventory management can only succeed with this objective if procurement managers know what products are most likely to sell in the coming quarters. With targeted selling, this information is readily available since the sales efforts are very focused on those potential customers most likely to buy. And you know what they are likely to buy
2. A regular flow of information from the sales team to those managing inventory can also help improve cash flow. You can consider techniques like Just-In-Time (JIT) to acquire products for resell or raw materials for manufacture only when the customer reaches a certain trigger point in the buyer journey.
In a B2B setting, maybe you start procurement from your suppliers once a Memorandum of Understanding is signed with a potential customer.
In a B2C setting, maybe you start purchasing from your vendors once the stock in your inventory or store reaches a Reorder Point.
3. Regular and detailed information from targeted selling processes can also reduce product shelf time and help decide when to move products from one storage location to another.
For instance, products can be moved from a warehouse to a store just before they likely purchase by a customer. This can reduce cost of storage because most certainly it is cheaper to store the product in a warehouse than on the store shelf.
Finance
Information from targeted selling processes help the Finance in many ways. Here are some of them.
- Finance will be able to better predict when a sale is likely to happen and therefore when the corresponding cash inflow event is likely to occur.
2. Finance can estimate when the Procurement or Purchase department is likely to request budget for purchasing from suppliers to manufacture finished products for sale.
3. Finance can better prepare for tracking marketing budgets during lead generation campaigns and then calculating the return on investment on these campaigns.
Sales
We have already seen some of the benefits to the Sales function from performing targeted selling. But let’s recap them here.
- In Targeted selling we target those customers who are most likely to convert in the short term. So, the conversion rates or deal close rates with targeted selling can be quite high.
- Better conversion also means more deals and better sales commissions – something very important to every salesperson. In many industries, salespeople are paid fairly low but offered very high commissions. In such cases, targeted selling can be very beneficial to the sales staff which in turn will lead to better satisfaction and retention.
- With Targeted selling you can hire specialist salespeople instead of general salespeople.
Look at it this way: You know that you are going to target a few segments. You know in advance the characteristic of these customers. So now you can hire salespeople who are perfectly attuned to selling to that type of customer.
In a B2B setting maybe the salesperson comes from the same industry as your customer and so is able to better understand their needs, drivers and motivations.
Key Takeaways
- Sales Targeting is a practice where we target only those potential customers who are most likely to buy from us in the near future.
- The intelligence gained from targeted selling can provide benefits across aspect of a business.
- We can implement Sales Targeting following these 7 Steps:
- Segment your market
- Develop Buyer Personas
- Confirm Product-Market fit
- Define Targeting criteria
- Launch Lead generation campaigns
- Filter & Score Incoming Leads
- Execute targeted sales actions
4. Targeted selling can give better returns on sales and marketing investments, improved cash flows, higher sales conversion rates, more efficient inventory management and more satisfied sales teams.