Why don’t we follow our instincts? We all know it’s best to sell to people who have a pressing problem and who are ready, willing, and able to buy a way to solve it. However, over the years I’ve seen numerous instances of companies, run by smart people, forget this when planning their go to market activities.
Back in November 2019, I was moved enough to write about it. Appearances can be Deceptive (https://www.adjacency.org/post/appearances-are-deceptive) talked about the dangers of targeting companies just because they look like your existing customers. In the intervening period I’ve become convinced that was just the tip of the iceberg.
To avoid the ignominious irony of basing an argument on gut feel and anecdotal evidence, I thought I’d gather some data on how companies build their list of target customers. So a while ago, I surveyed 270 B2B companies and asked owners, C-level execs, Presidents, Vice-presidents, and senior directors about how they created their sales funnel. The results were… interesting.
Worryingly, the survey suggested leaders love to kiss frogs. They select targets seemingly at random or with their hearts, not their heads. I’m sure you’ve sat in meetings and heard senior people say “Company X would be a great logo to get” or “Our competition makes a lot of money from X, we should be able to do the same“ or “X is a lot like one of our existing customers, they’d be a good target”. When you indulge in kissing frogs, you’re focusing on who you’d like to work with, not on who is most likely to buy your service or product because it solves their problem or answers their need.
Most respondents ranked generating more revenue quicker as the biggest benefit of targeting customers based on their likelihood of buying - and yet they built their target lists with neither science or insight. Not only that, they also used high-value resources – mostly directors and salespeople - to execute on this unscientific go to market strategy, rather than more transactional resources or general brand building. They were shooting in the dark and using the most expensive resources available to do so.
When I work with Adjacency’s clients to help with campaign design, I use a method called Motivation to Act (MTA). Simply put, it helps you prioritise who you will campaign to by understanding which of your target customers have enough of the underlying conditions to make them “do something”. Customer inertia (or ‘do nothing’ by default) is your most formidable competitor. No matter how good your solution is, you won’t sell it if the customer doesn’t have sufficient “motivation to act” – and if they lack that fundamental motivation (a combination of situational and performance issues), there is little point spending your time prospecting / campaigning to them. To illustrate the point, if you’ve developed a solution for more efficiently managing cash in a business, don’t waste time targeting companies who don’t have enough of a cash problem; target the ones for whom cash management is a real and present issue and do it when the time is right.
Which company would you rather be - one that a) creates lots of leads (consuming resources to nurture and qualify) with organisations who are not in the right place to buy or b) focuses on targets who have the right conditions fitting your proposition and are more likely to do something? Of course, there’s no silver bullet but choosing the first option is guaranteed to result in higher costs of sale, delayed and/or reduced revenue, and greater friction between sales & marketing. It’s a problem that will only get worse as the number of people involved in the buying decision increases - you end up talking to more people showing faux intent and creating more activity, yet who are less able to actually act.
I believe the better option is to build your target list based on a clear understanding of whether an organisation signals it has enough reasons to do something. In nature, many animals give out pheromones to let potential mates know when they might be receptive to being approached. Businesses are the same if you know what signs to look for.