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Customer Profiles for New Business

Written by: Nikki Owen

Article Overview: In 1906 an Italian Economist called Vilfredo Pareto created a mathematical formula based on observing that 80% of the land was owned by 20% of the population. Dr Joseph Juran, a Quality Management pioneer also recognised this universal principle that later became know as Pareto’s Principle or The 80-20 Rule.

Customer Profiles for New Business

This predictable imbalance has been expanded and applied extensively since it’s creation, and while the figures may not be exactly 80% and 20%, the notion that most of the results come from a minority of activities can help increase the ability to separate the essential from the non-essential.
Use of ‘Pareto Thinking’ is highly relevant and important when applied to sales people. For example, 20% of sales people’s activities will create 80% of sales achieved, which has enormous consequences on how to optimise and manage lead generation activities.
Generating leads is an important sales activity that plants the seeds of growth for sustainable business development. A lead is purely a name that you could refer to as a SUSPECT because their potential to buy is unknown. Before you can qualify leads to determine whether they have the money, authority and desire to buy your products/services you need to generate them! When deciding upon which lead generation methods work best for you and your organisation, it helps to have clarity on the type of customers that you’d like to attract. This means creating an Ideal Customer Profile that can begin to provide direction to your lead generation activities.

The following questions will stimulate your thinking when it comes to developing an Ideal Customer Profile:

● What size of organisation would you prefer to deal with?

● Typically, how many people will they employ?

● What market sector(s) do these organisations operate within?

● Who specifically will be buying your products/services and what are their titles?

● Where geographically would you like these organisations to be located?

● What does your organisation offer that is unique?

● What types of organisations will be attracted by this uniqueness?

● What do your best customers possess that you would like to replicate in others?

● Which of your existing customers were the easiest and quickest to convert?

● What similarities do these customers possess?

● Are there any specific criteria that prospective organisations should have in place, so that your products/services can be optimised?

Having a well-defined profile of your ‘ideal customer’ can prove to be invaluable when determining which methods to use for lead generation, and improves the effectiveness of marketing initiatives. You may also discover that the process for asking for referrals becomes easier and generates a better response, because you are providing the person with a tighter specification of what you are looking for - this concentrates their thinking towards the direction you have defined.

There are so many sources of leads that the process of generating leads can sometimes cause sales people to feel overwhelmed when tackling this vital sales activity. Every organisation is unique and can employ a variety of approaches in their quest to attract the attention of their target market. (This will become even clearer once you have created your Ideal Customer Profile). That’s why it can be extremely useful to invest some time analysing which lead generation initiatives worked well in the past, why they worked well and what improvements can be made to optimise their effectiveness. There are 3 areas that you may want to consider that can help evaluate different
lead generation initiatives with greater objectively:

1. Effectiveness – which lead generation activities produced the most quality leads?
2. Cost – what were the tangible costs for each lead generation initiative?
3. Time – how much time did it take to initiate and follow-up on each initiative?


1. Effectiveness
● What number of leads were generated?
● How many of these leads became qualified prospects?
● What business was generated from these leads?
● What is the projected probability of business generated from these leads for the next 12 months?

2. Cost
● How much did this lead generation initiative cost?
● Using the number of actual leads generated, what was the cost per lead?
● What profit contribution was made from leads generated over a 12 month period? (Gross margin from sales, minus the cost of the initiative.)

3. Time
● How much time did salespeople invest in following up on these leads?
● How much time did they spend on leads that did not become qualified prospects?
● What was the cost of salespeople’s time spent on this lead generation initiative?

Whatever lead generation initiatives your organisation chooses to implement,
Sales people can leverage these opportunities if they are able to provide timely follow up within 5 working days from receiving each lead because people’s interest cools off after time and many will forget that they even registered their details with your organisation.

Results from direct marketing can be transformed by combing this approach with a phone-based strategy. If your sales team are currently sending out letters and literature to generate leads, this approach can be much more effective if the letter/literature is followed up with a phone call within 3 days

Related Articles
  Profile Customers to Manage Opportunities
  How do I use Social Networks for Marketing?
  Psychographic Profiles
  Social Media is Getting Even Easier
  Managing Your Online Reputation

Article Tags: clarity, consequences, customer profile, desire, existing customers, generating leads, generation activities, generation methods, market sector, money, notion, organisations, plants, seeds, sustainable business development, uniqueness



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Re: Two Useful Books To Help You Focus On The CLIENT - Hi David, To add to your thread, I'd like to recommend Jonathan Tisch's "Chocolates On The Pillow Aren't Enough: Reinventing The Customer Experience". Tisch's book includes content on "Welcoming Customers", "The New Art of Customization", "The Challenges of Customer Diversity" and "Offering Something Extra to Your Customers" to name a few.
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
Re: Paypal process $315 million in payments per day. - I agree with you David, their Customer relations suck. This mean other payment systems like 2CO and WORLDPAY should work on their customers relations to take more slice of the market.
Categorizing the Famous Entrepreneur Profiles? - By the way Evan, what do you think about my idea to categorize your list of Famous Entrepreneur Profiles by industry rather than by alphabetical order? For instance, if I was a small business owner looking to enter the food industry, I might want to look for inspiration from famous entrepreneurs in a related field (like profiles on Dave Thomas, Harland Sanders, Debbi Fields, etc...). It just seems a bit time consuming having to run down the long list of names you have on the "Features" page. Thanks


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