It is crucial sales teams focus on the right leads when prospecting. Specifically Targeting customers who need your product can not only increase business conversion rates but maximises profits as sales staff waste less time pursuing irrelevant leads.
In this article, we will look at methods to find your ideal customer and how Red Flag Alert’s data can help businesses create effective prospecting lists.
How to use profiling to target ideal customers
Red Flag Alert's Prospector Tool provides businesses with the data they need to create detailed buyer profiles which they can use to find leads.
B2B companies profile potential clients in three ways:
- Customer Groups
- These are different clusters of customers that share common characteristics.
- Customer Groups are similar to customer profiles, however you must go through a process to identify a customer profile.
- Ideal Customer
- Ideal customers are profiles that represent your most profitable customers.
- Your main goal as a business is to identify these customers and target your sales and marketing towards them.
- Buyer Persona
- This is a fictionalisation of the personalities that could buy from you.
- Companies develop buyer personas using market research as well as their own sales data – it’s important to note these apply to people, not businesses.
Creating a profile, a two-step process. The first step is to define who your ideal customer is, and the second is to find businesses that match this profile.
Step One: Find Your Ideal Customer
One of the best sources a business can use to create their ideal customer profile is their current client base. By reviewing their client base companies can see what similarities their best customers have and use these attributes to target new business.
Red Flag Alert’s data can help you identify metrics within your customer base to zero in on your perfect customer.
To make the most accurate and effective customer profile, you can use the four main customer profiling methods listed below.
Demographic
This is profiling based on things you can factually say about the person/business. These attributes will make a big difference to how you sell to your target audience, they could include:
- Age/when it was established
- Sex
- Nationality
- Education
- Income/revenues
- Job Title
- Number of employees
Psychographic
This is profiling based on the psychological characteristics that drive your customers’ decision making. For individuals and businesses this will cover:
- Values and opinions
- Goals
- Motivators
- Interests
- Pain points
- Fears
Geographic
This method includes information around where a company is based and what kind of environment. These factors can affect a range of factors from how the company does business to how easy it is for them to travel. This includes:
- Country, region, city
- Rural or metropolitan
- Coastal or inland
Behavioural
This type includes the habits and actions the customer makes from a sales perspective. This could consist of:
- Customer loyalty
- Buyer readiness
- Satisfaction
- How when and where they engage with your company
- Purchase history
- Product or service use
- Purchase frequency
Behavioural profiling also includes customer difficulty; how hard it is to get a customer to buy and how much support do they need once they’ve purchased the product. This shows how profitable they will be. If a customer takes up too much time, it may not be worth pursuing their business.
Step Two: Target Customers Based on These Profiles
Once a business knows the type of customer likely to need its service, the sales team can filter the Red Flag Alert database to build a targeted list of prospects.
These lists will consist entirely of companies that fit your customer profile, meaning your sales teams won’t waste time chasing leads unlikely to need your business and will increase conversion rates by selling to only those that do.
Businesses may have multiple types of ideal customer. In this case, you can segment customer bases into different buyer profiles, this helps sales teams create effective strategies for each type of customer.
How Clearly Defined Customer Profiles Can Help Sales
One of the most powerful tools Red Flag Alert offers for building customer profiles is the creditor services data. Decisions over which customer groups are most profitable are often made on the opinions of a few influential people at a business. Customer profiling is based on data, meaning facts with guide your sales and marketing decision making process.
Additional benefits could be:
- Finding prospects that suit your business.
- More efficient sales.
- Better customer experience.
- Better Retention.
First: What is Creditor Services Data?
When a business fails, it often leaves unpaid creditors. In many cases these unsecured creditors stand little chance of getting all their money back, leaving them facing financial uncertainty and possible insolvency.
Creditor services data shows when a business is an unsecured creditor in an insolvency. It details when the bad debt occurred and how much the business stands to lose. Red Flag Alert’s data covers six years and over 900,000 instances.
Most businesses can use this information to manage risk. However, for some — such as the example below — it's possible to use the data to identify a selling opportunity.
Case Study: Red Flag Alert Data Helps Financial Broker Drive 24-Fold Conversion Ratio Increase
The business in this example provides asset or personal guarantee backed working capital loans to businesses in the manufacturing sector. Here is how they utilised Red Flag Alert data to target companies based on detailed buyer personas.
Before Red Flag Alert
Before implementing Red Flag Alert data, the business’s sales team targeted any manufacturing business within 125 miles of Manchester. Using this system, the business had a conversion ratio of 0.5%.
After Implementing Red Flag Alert
Using Red Flag Alert data, the finance broker was able to target more specific types of business based on its ideal customer profile.
It still targeted businesses within 125 miles of Manchester. However, it added the conditions that the business has a current ratio of below 0.9%, that the business is at least seven years old, that it has a turnover of £1.2 million, that it is run by at least three directors, and that it has less than two CCJs against its name.
These changes saw the company’s conversion ratio increase to 5.5%.
After Adding Creditor Services Data
Adding creditor services data allowed the company to begin targeting businesses that not only met the above criteria, but had also been unsecured creditors in insolvencies worth £30,000 or more in the previous six months – a clear sign that the company may need a short-term cash injection.
This suspicion was correct. After adding creditor services data to its targeting, the business saw its conversion ratio shoot up to 12% – a huge increase.
Features of Red Flag Alert Data
Are you losing time and money searching for potential clients? Red Flag Alert is the perfect source of data for B2B companies looking to create more accurate customer profiles and build effective prospect lists.
Here are some of features you could benefit from:
- RFA data covers every business in the UK, so you won’t miss out on any potential customers.
- The data is filterable based on several crucial metrics. This makes it easy to build lists based on your customer segments.
- The data is updated over 100,000 times every day. Not only can sales teams be sure they are using the most up-to-date information, but they can identify buying indicators as soon as they occur.
- The Red Flag Alert API allows businesses to integrate the data within their existing CRM.
To discover how Red Flag Alert data can help with your prospecting efforts, why not book a free trial?
