Effectively targeting and pursuing segments of customers or prospects is foundational to salesperson and sales organization success.
Targeting is simple and based on equally simply “sales math” – focus selling efforts on the segments that will provide the best return on investment and opportunity for revenue and profit growth.
Marketing typically initiates the targeting effort by providing a technicolor view of the best customers or prospects where sales should focus their time. The example below is as straightforward as it gets.
If the sales team buys into the target market definition, you would expect 80% (or more) of the sales pipeline to comprise target market deals. However, we often see sales pipelines primarily comprised of less desirable companies than the target market.
Marketing and the leadership team expect a sales pipeline like Figure A on the left, but they will often see it more like Figure B on the right.
The misalignment between marketing’s direction of the target market and the sales team pipeline composition can impacted by the following:
1. The CRM must identify the Target Accounts so marketing and sales can see activities and outcomes. The sales team needs to see marketing initiatives at the account and contact level, while the marketing Team needs optics on the composition of the sales pipeline.
Sales pipeline composition (the percentage of target accounts or the target market) is a vital leading metric for the leadership team. The longer the sales cycle, the more critical the metric. Many marketing teams rely on a won deals metric (lagging metrics) to measure the success of targeting efforts, often too late to deploy meaningful sales and marketing activity adjustments.
2. The leadership team should regularly review the sales pipeline’s composition by asking, “What portion comprises the target market?” No proportion applies to all companies and industries, but 75% of the sales pipeline sourced from the target market is a good benchmark.
If the sales pipeline source proportion is out of balance, a collaborative diagnosis can provide insight into countermeasures.
Perhaps marketing has not supported the sales team with the marketing materials or initiatives needed to penetrate the target market. Maybe the sales team has limited experience selling into the target market and requires additional training and coaching.
Regardless of the potential barriers to penetrating the target market, marketing and sales leaders must be accountable for success.
3. Look for the signs of misalignment between sales and marketing. Marketing teams need regular and constructive feedback from sales, and they must be willing to adjust marketing efforts and recognize when they might not have “gotten it right.”
Sales teams must demand to be part of the marketing initiative development and management process. Sales teams want to understand their target market better, but marketing may have a role in providing the tools or materials to engage with the target market successfully.
4. Shifting the sales efforts to a Target Market takes time. Sales leaders focus on hitting sales goals, regardless of whether they come from the target market.
Regularly pipeline reviews and coaching sessions have proven to have a significant impact on sales performance. The results will come if sales leaders consistently work with their sales teams to improve target market penetration. Otherwise, target market penetration will be challenging.
Integrated marketing and selling efforts are essential to successful target market penetration.
It may take time to calibrate selling efforts to produce the desired outcomes, so start with the suggestions above to accelerate change.