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Segmenting your customers by demographics alone is a sure way to failure. Yes, it is good to know in which age category and geographic region a person falls. Does it tell you much about how to add value to their professional or personal lives though? No, not really. If your company doesn’t add value worth paying for, then why would anyone buy your product or service?
The single biggest reason why so many companies, big and small, fail to grow is because they do not fully understand their customers. We know that the modern buyer does not accept generic, unpersonal and irrelevant messaging anymore. If I were to ask you right now to describe your ideal customer, how far would you get? Perhaps where they live, maybe in which industry and market segment they work, and what sort of function they have. As a business leader or even as a company owner, how many more useful characteristics can you come up with on the spot?
The better your understanding of your ideal customer, the more targeted and relevant your marketing strategy will be, the more qualified sales opportunities with good-fit companies you will generate, the more your sales team will sell, the more and better your business will grow. It’s really that simple.
If you’re in B2B, the first thing your leadership team must do is agree on the type of businesses you’d ideally sell your products or services to. That means you must ask yourselves what business problems you actually solve for, and what types of organizations care most about solving those specific pain points.
Obviously, there is a myriad of company headcount sizes, industries, segments, regions, ambitions, revenues, budgets and ages to choose from. Whereas each organization will have their own specific challenges, many of your customers will experience the same issues and limitations. Finding that common ground and offering a good solution will result in growth.
On the other hand, it may be just as important to identify what kinds of organizations are not a good fit, typically turn out not to be a good customer, and who you marketing and sales teams should not be spending time on.
To illustrate: amongst many others, at TeQflo we work with customers in transportation, software, machinery and insurance. Different industries; very similar growth problems. We typically prefer not to work with customers where there is no active buy-in, engaged leadership and change management from the C-suite, because we know from experience those relationships tend to be less successful than anyone would like.
So now we have a better understanding of the good-fit companies that actually need your solution. Unfortunately, the legal entity that is a company doesn’t actually buy anything. It’s a group of humans within that organization who decides. We call that group the buying center. It typically looks like this:
On average, most B2B buying centers will include anywhere between 4 and 8 people. You can safely assume that the bigger the prospective customer and the bigger the contract value is, the more buyers are involved. If you’re selling budget-range solutions to a relatively small SMB for example, you’ll probably get away with just having to persuade the business owner or CEO (taking on the role of decision maker, approver and buyer), and perhaps one other team member (in the role of user and/or influencer). On the other hand, I’ve personally sold to larger organizations with buying centers including more than 20 people. Understanding who they are as a person, what they need as a professional, and the role they play in de buying center is key to being successful.
As you can see, the typical buying center includes a wide range of people and roles. Don’t forget that the composition of a buying center may change over time, especially when your sales cycles are relatively long. To illustrate; LinkedIn research has shown that on average, per year ca. 20% of Decision Makers (Director and up) will change roles, and they are 120% more likely to do so in January than in any other month. In practice, that means you’ll have to carefully re-evaluate what your customers’ buying centers will look like several times per year, to avoid missing out on key stakeholders and subsequently losing deals.
In spite of all the technological advancements our society is going through, people still buy from people. That also means that, if your company is truly on a mission to acquire more and better customers, you have to carefully develop your buyer personas. Our partner HubSpot says:
A buyer persona is a semi-fictional representation of your ideal customer based on market research and real data about your existing customers. When creating your buyer persona(s), consider including customer demographics, behaviour patterns, motivations, and goals.
In other words, a buyer persona is a detailed and validated description of the person you ideally want to sell to and work with. Historically, most companies have limited themselves to vague descriptions that only include demographics such as age, gender, location and perhaps a function or title. That approach to customer understanding -or lack thereof- is no longer sufficient.
Whereas there is no single magical formula to go about developing buyer personas, we typically see that several key questions must always be considered:
Of all the questions you can ask, the most important elements are related to the buyer persona’s key professional or personal challenges. Humans as a species are much more willing to purchase a solution that removes a pain, than they are to acquire a gain of equal value. In other words, if you truly want to understand your customers, it is crucial to learn about their most pressing problems.
A mistake that many companies make, is that they solely rely on in-house knowledge and opinions to develop their buyer personas. Although that is a good start and it may result in a decent draft, we always recommend testing and validating these assumptions in the market by interviewing customers. After all, who better to tell you what your customers really need or would like to see differently, than your actual current and past clientele?
Organizations that are a bit more advanced on the scale of digital mastery, might also supplement their qualitative buyer persona research with quantitative data and statistics. To illustrate, it may be very useful to quantify your customers’ emotions, preferences and sentiments. Ultimately, people base their purchasing decisions on their emotions and only then justify their decisions with logic. Understanding how certain feelings trigger and impact a customer’s perception of your organization’s added value may prove to be one of the strongest insights your marketing team can collect!
Some may find this is a silly or “fluffy” question, but what feeling would you say your customers are really buying from you?
Bear with me and let’s do a quick exercise. Have a look at the two images below:
What do you see? What are these customers really paying for? Are they just paying for a new lock or a sweaty room filled with weights, or is something else that drove them to this purchasing decision? What feeling do you think a lock smith or a gym instils in its customers?
I’m sure you’ve guessed it, but a locksmith doesn’t just sell locks. He sells a sense of safety. A gym owner doesn’t just sell a space to work out. He sells a sense of self-improvement and personal health. Everybody wants to feel safe; most people want to feel happy and healthy. Those are strong emotions to build a compelling proposition upon!
Truly understanding your customers, means truly understanding how you can help them feel better about their individual lives, their professional lives, and their families’ and friends’ lives. It may sound fluffy, but research has shown time and time again that people predominantly base their purchasing decisions on emotions first, and only then try to justify their decisions with logic.
Let’s explore this notion further with an example. Say you’re a freshly appointed first-time CFO buying a new invoicing software package for your company. Perhaps it’s not the most exhilarating purchase of the year, but an important one nonetheless. Taking a look at the graph above, when evaluating this potential purchase, at times you may find yourself feeling:
I’ve personally never sold or purchased invoicing software and I’m no expert, but I would imagine that the most important basic emotion for invoicing software vendors to focus their marketing content on, would be to instil a sense of peacefulness. As a CFO, you want to be able to trust the reliability and dependability of the software, knowing that invoices are going to be sent and paid on time, every time.
Q: Now, I ask again: What feeling are your customers really buying from you?
Whereas most leadership teams can -and should- learn a thing or two about their customers’ emotions and feelings, this is not to imply that ratio and logic should be neglected. On the contrary: the left side of your brain controls the logical tasks, such as science, math and overall objective data-driven decision making. In purchasing processes, logic plays a significant role. It determines factors such as the perceived levels of quality of your product’s features, perceived competitive pricing and expected reliability.
An example of where rational decision making often occurs is in commoditized sectors, such as the office printing paper industry. Every company needs it, there is practically no difference in product quality between vendors, and I wouldn’t imagine that brand recognition plays a big role in the decision-making process. You probably just want decent-quality printing paper for a low price, and emotion barely plays a role.
Most of us do not (only) sell highly commoditized products though, yet all of our customers will -to a certain extent- evaluate our offerings with the left side of their brains. That brings me back, yet again, to the importance of truly understanding your customers. Business leaders whose companies work with above average rational decision-makers, must adapt their digital go-to-market strategies accordingly.
To illustrate, some of you may market and sell to highly technical or number-driven buyers such as engineers, CIOs, scientists, founders with PhDs in a technical field, etcetera. They will evaluate and interpret your marketing content differently compared to the more emotional buyers such as the ones with an artistic background, or buyer personas who typically score low on the blue side of the DiSC personality profile. It obviously does not make much sense to target analytical and rational buyers with highly emotional marketing messaging alone, or the other way around.
That being said, even the more rational buyers are still humans: whether they are aware of it or not, emotions will drive purchasing decision first. Data and logic serve to justify their decisions second. The question is just well you understand their decision making process!
If I would’ve gotten 1 euro for every time I’ve seen or heard a company claim that their best and most unique differentiating factor is something along the lines of “We really think along with our customers and try to solve for their specific needs” …
People, please. Thinking along with your customers and solving for their needs is a pretty basic requirement for doing business. If an entrepreneur or sales rep would tell me that’s their very best asset, I would seriously doubt the quality of their product or offering. Sure, there may be some companies whose customer service quality is so ridiculously good it’s actually a key differentiator. In 99,9% if the cases it’s not though, and the only reason why anyone would claim their customer-centricity as a unique selling point is because the leadership team couldn’t come up with anything better.
One of the best ways to set yourself apart from the competition, is by making working with your company unique and finding customers who care most about those differentiators. These customers will prefer to buy from you rather than from your competitors, they will be willing to pay higher prices, meaning you’ll generate more profits which you can then invest back in product development and marketing, expanding again on your differentiating factors and entering a comfortable loop between happy customers and increased profits.
On the flip side, there are many leadership teams and boards who are not seeing the expected returns because their organizations are not recognizably different from any other competitor in the market. Usually that leads to having to differentiate on price, which means higher discounts, lower margins and profits, less resources to spend on product development and marketing, resulting in even less uniqueness, and ultimately a vicious cycle of financial pain and agony. I call it the "Wheel of Slow and Painful Death":
Q: If you’re completely honest with yourself, which of the two situations above resembles yours most?
For starters, let’s take a step back and answer all of the following 6 questions from your customers’ perspectives in as much detail as you can:
Putting yourselves in your customers’ shoes, on a scale from 1-10 how compelling are those differentiating factors really? To what extent would you feel excited to buy from you, if someone tried to explain how that is what makes working with their company unique?
Let’s assume you have identified several unique elements that makes working with you, different from working with your competitors. Now we have arrived at the next question:
Q: Why would your leads and customers care about your uniqueness, and who will care most?
A satisfactory answer shows that you understand how you’re really adding value to which key buyers, in your own specific way. Hopefully, this question also shows that differentiation by itself is not a goal. Rather, differentiation should be a means to an end. The end is truly understanding your customers’ pain points, and helping them solve those challenges in a way that aligns with your customers’ preferences. In most industries, the market is big enough for a wide range of players and approaches. It’s up to you as leaders to become the very best at what you do, for your ideal buyers.
All the elements we’ve discussed about truly understanding your customers, culminate in the design of a problem-based buyer’s journey. HubSpot describes it as “the process buyers go through to become aware of, consider and evaluate, and decide to purchase a new product or service.”
If executed well, the buyer’s journey will help establish your company as a knowledgeable, human, customer-centric and helpful entity. In turn, that will result in a more effective digital presence, more and better leads, more and better customers, and ultimately more and better business growth.
Typically, a buyer’s journey consists of three distinct stages:
Circling back to the purpose of this guide (truly understanding your customers), the quality and effectiveness of your buyer’s journey highly depends on the degree to which you understand your customers’ most pressing problems.
The outcome of your buyer’s journey is merely the result of all the actions that preceded it. The desired outcome of any buyer’s journey is obviously for your sales team to meet with as many qualified prospects as they can handle, and preferably a few more for good measure. If that is not happening, then clearly your company wasn’t short listed by enough people as a potential vendor. In turn, that probably only happened because your potential solution was either simply deemed too light, or the lead never even considered your solution as good option to begin with. Neither of those two explanations sound promising, do they?
Let us reiterate that buyers will go through a mental evaluation process anyway, for every single purchase, regardless of whether you’ve designed a buyer’s journey for your company or not. It is therefore your own choice as a CEO, CMO or CSO, as to what extent you’re going to be considered in the prospect’s purchasing decision. If you do want to play ball, here’s how you should be thinking about your company’s buyer’s journey – from your customers’ perspectives of course:
Awareness stage: What kind of pains am I experiencing and what is my problem?
In this stage, the lead experiences a pain point and evaluating to what extent solving that problem is a priority worth pursuing now.
Example: A CEO from a mid-market company in the logistics industry has received critical questions from the board as to why their revenue growth is stagnating. He’s been asked to come up with a plan to increase sales by 20% within 9-12 months, which means he must find a solution urgently.
Ask questions such as:
In this stage, the prospect has determined that the solving the problem does indeed have priority and she is actively looking for ways to remove the pain point.
Example: Our CEO has asked his CMO and CCO to present 3 alternatives to increase revenue by 20% within 9-12 months. Together, the leadership team have decided to consider several local marketing and sales consultants, purchasing marketing and sales automation software, and simply hiring 20% more sales reps.
Ask questions such as:
In this stage, the prospect has identified the best way to solve her problem and is now deciding on the specific vendor or partner she wants help from.
Example: The team have concluded that, due to hiring and onboarding time, increasing headcount won’t work within the set timeframe. Whereas hiring a marketing and sales consultancy firm is an effective option, they feel like they would prefer not to be dependent on outside expertise too much, so that alternative has been parked for now. This leaves them with the third option: purchasing a software solution that is easy to implement and drives results quickly. Based on their peers’ recommendations, they’re deciding between HubSpot and Salesforce. HubSpot is easier to use and implement, Salesforce is more customizable.
Ask questions such as:
Upon completion of steps 1-3, after the empathizing and “thinking work” has been done, it is now time to act; investing in regular and compelling content production, that relates to your buyers and the mental steps they go through when making a purchasing decision. Your customers will appreciate that your company understands how they’re thinking and what information would be helpful at which moment. Marketing and sales are now in a much better position to actually drive added value for your leads, prospects and customers before they make a purchase, hence increasing the likelihood of said buyers indeed making a purchase. And that, my friends, is the essence of digital mastery and growth!
Q: If you were your own company’s customer yourself, what types of content and information would resonate most with you? What would you not find relevant and helpful at all?
As a driven marketing and/or sales leader, you’re always looking for a competitive edge. So, if you want to take the design and effectiveness of your buyer’s journey a step further than most other companies do, then I would recommend having a look at the next 3 steps as well. In the end, you don’t just want more and better customers; you want happy customers that stay, return, and expand the relationship, right?
Purchasing stage: How can we best implement this solution to resolve my problem?
In this stage, the customer has purchased her solution of choice, and she is now allocating resources to drive an effective and timely implementation within budget.
Example: The logistics leadership team have ultimately decided for implementing HubSpot’s Marketing Hub to better monetize their digital channels, increase net new lead generation, and leverage marketing automation to nurture their existing database into more sales meetings. They know that their sales team is relatively successful once they meet with good-fit companies and its decision makers, so their first objective is to increase the amount of monthly qualified sales meetings by 25%, just to be on the safe side. They have also requested a local HubSpot Partner to help them with strategizing, technical onboarding, and running effective campaigns. Internally, they have appointed the CCO as project leader and he has gladly accepted accountability for driving this initiative. The sales team have been trained on the new digitalized sales processes, and the marketing team is looking forward to proving their value to the sales organization.
Ask questions such as:
In this stage, the customer is reflecting back on her purchasing decision and evaluates to what extent her pain point has indeed been removed effectively, timely and within budget.
Example: It has been 9 months since our CEO was tasked with increasing revenue by 20%. After a 3-month evaluation process, 3 months of onboarding and 3 months of running campaigns with the HubSpot Partner, they are now really starting to see the positive impact of their decision to invest in digitalization. Marketing generates more and better leads, helping sales to spend more time meeting with qualified buyers at good-fit companies. Whereas they still have to close some deals to reach their goal, the weighted pipeline value has almost doubled! The CCO, as project leader, is not only happily surprised by the results, but also the proactive support, functional expertise and advice, as well as the personal interest in his success that HubSpot showcased.
Ask questions such as:
In this stage, the customer has been convinced of the solution’s effectiveness and is now evaluating to what extent the vendor/partner is able to remove other pain points as well.
Example: The board, satisfied with the 21,7% revenue growth that was ultimately achieved, has now set its mind on increasing the company’s profitability. After several analyses, they have suggested that our CEO improve on two metrics they’d never really looked at before: lowering the Customer Acquisition Costs by 10% whilst increasing the Customer Lifetime Value by 50%. As a next step, the CCO and CMO are asked to work together and drive efficiencies in the new business organization, while simultaneously increasing the average yearly spend from their existing customers. Given their positive experiences with HubSpot as their all-in-platform and the Partner they’re working with, they have set up a meeting to discuss their new objectives.
Ask questions such as:
Marketing may be perceived as somewhat “fluffy” by C-level executives who don’t have a strong commercial background. We see and hear about the negative effects of that outdated mindset almost every day, in the shape of a vicious cycle that typically looks something like:
Dear business leaders, if the above sounds anything like your organization, it is imperative you ACT now. Your growth problems aren't going to solve themselves, so that gives you exactly two options:
AutoConcept is a growing insurance company with proprietary insurance system. HubSpot became the obvious complement.
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