Bb 2. Targeting Segmenting and Profiling How to generate leads and get new customers I N S I G H T. Profiling. What is Segmentation?

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1 Bb 2 ISSUE 2 Targeting Segmenting and Profiling How to generate leads and get new customers Profiling Why, what does it entail and how do you do it? What is Segmentation? The method and the benefits

2 Targeting Segmenting and Profiling How to generate leads and get new customers With budgets tighter and businesses under more pressure than ever, more and more companies are finding it difficult to get extra business from their existing customers. This means that increasing your revenue, and even maintaining current revenue, is dependent on finding more new customers. However a survey conducted by CSO Insight revealed that 77% of companies (nearly 8 in 10!) * believe that their ability to generate new leads and therefore find new customers is at best, poor. And of those just over a third described their ability as dismal! So how do you generate leads efficiently & get new customers? One of the better known marketing idioms says: I know that 50% of my marketing works, I just don t know which 50% The most frequently used sales and marketing methods: > Tele-sales > Field-sales > Exhibitions If you are you are similar to 95% ** of other businesses in the UK you are probably already using at least two of these methods. You know that in order to increase the number of leads you are generating and new customers you are getting changes and improvements need to be made but with change and expansion of sales and marketing comes risk - the risk of budget wastage. The risk of budget wastage, opportunity costs and the time and resource that a new or expanded sales and marketing strategy implies can discourage businesses from making the investments that could lead to growth and success. And, some would say, with good reason. Up to 90% of marketing spend can be wasted as a result of bad quality data, where it is spent on poorly targeted communication, or because response is low as a result of irrelevancy to the audience. This risk and wastage can be reduced and even eliminated with the use of best practice targeting, segmentation and profiling techniques giving you the confidence to move forward with a successful lead generation programme for your new business sales campaign. *CSO Insight **Cardel Media > Referrals > Direct Mail > E-marketing > Website / Web Promotion > Advertising

3 Profiling What exactly does it entail? How do you do it? 1. Identify the characteristics you will use in the profile i.e. type, size, structure, buying habits, and financial impact. They should help reveal the customer s profitability. 2. Place the customers on a spreadsheet with each characteristic. Look for patterns in this information. From these patterns, you can start to build a profile of your best customers and possibly your worst customers, too. Why profile your current customer base? The main goal of profiling your customers is to identify the characteristics of good and bad customers and therefore substantially improve your chances of finding and targeting the best prospects and converting them into customers. Incorporating customer profiling into your strategy can revitalize your sales and marketing efforts & lead you to new and profitable territory. Customer Profiling will help you: 3. Prioritize these major characteristics as either primary or secondary factors. List your customers & rate customers on each characteristic, with the highest score being the best. Primary characteristics have higher value than secondary i.e. primary scored 1 to 10 and secondary factors scored from 1 to 5 giving primary characteristics more influence. 4. The customers with the highest totals indicate your most valuable customers based on the chosen characteristics. The lowest totals may indicate less profitable customers. With the conclusions you draw from profiling you will be able to identify what your ideal prospect looks like invaluable for marketing and sales teams when sourcing leads and mailing lists or target prospects for sales calls. > Discover which customers contribute most to sales and profit > Identify customer groups who have future growth potential > Find unprofitable customers and allow you to repurpose resource accordingly > Use accurate defined criteria rather than just general impressions to make business decisions confidently > Give your marketing and sales efforts focus & direction & allow you to use your resources more effectively

4 Targeting & Segmentation In order for a segment to be successful it must be; measurable have easily definable characteristics, be substantial & sustainable it must be large enough to be profitable and make it worth serving and finally it must be accessible you must be able to reach the companies and communicate effectively with them. Your segmentation strategy How to proceed will depend on your industry, resources, and growth aspirations as well as reasons unique to your own situation; however the basic segmentation strategies are as follows: > Undifferentiated Strategy: Ignore segments and sell & market to your entire target market with one message and one approach Why try to reach the forest when your message is only relevant to a few trees? What is Segmentation? Segmentation is the process of identifying the needs of and recognising variation between, groups of customers and developing a distinct message or product offering for each. But segmentation must be realistic - resources will not allow you to be everything to everyone. Offers must be targeted at people who really want and need them, and those who do not must be set aside. The benefits of segmentation seem clear, but it is not as easy to decide how to segment your target market. Business-to-business customers have complicated characteristics and needs. A good starting place is with the following three methods which can be used in isolation or together: > Focused Strategy: Concentrate on a single segment tailoring your efforts to suit them > Differentiated Strategy: Target several segments with individual differentiated strategies for each Benefits of Segmentation Segmentation allows you to tighten up your target market, prioritise the most profitable segments and focus your efforts on sourcing prospects in those areas. You will also have knowledge of the characteristic prevalent in each segment which will allow you to better communicate with potential customers and meet their needs. Ultimately you will be more likely to convert a target market into new customers. > Location Most industries display regional similarities in the use of products which allow for geographic segmentation this type of segmentation can be helpful to sales teams too who will be able to better take advantage of referral opportunities. > Firmographics Segmentation can also be applied based on company size or activity. Large companies have different buying processes and purchasing groups (more detail in B2B Insights Issue 1) to small companies. The products or services they offer will also affect what they require from their suppliers (you). > Relationship Importance Customers can also be grouped by importance to your company and your profit margins i.e. by key account. This type of segmentation ensures that potential long term or particularly profitable customers can be pursued, acquired and serviced more effectively as resource can be allocated accordingly.

5 And that s where Kompass comes in Summary By carefully selecting your target market, segmenting that market and profiling your existing customers you will be able to precisely target your sales and marketing teams to source leads and new business prospects in the right areas and to support your business objectives, sales, revenue and growth. 1. You will successfully win more new customers and these customers will be the right type of customers who have the potential to become long term, profitable partners In order to implement your new business intelligence you will need access to: > Reliable and good quality data 2. You will be part of the 23% * who believe that they are happy with their ability to target new business 3. You will Increase revenue *CSO Insight > The ability to accurately select companies that match your profile and fit within your market segments > A good depth of information on each contact to ensure they are the right type of prospect for you Kompass operates in 60+ countries where local dedicated data integrity teams continually update business information to ensure the most up to date information is published. Kompass allows you to target companies quickly and efficiently, giving you detailed information about what they actually do rather than just telling you what broad industry category they belong to. The unique Kompass classification system includes over 56,000 product and service terms, and has over 30 profiling criteria to ensure your prospect selections are finely targeted and easily refined.

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