Four Tips to Help Sales Teams Improve Target Market Penetration
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- The CRM Must Identify the Target Market Account
- The Sales Leadership Team Should Regularly View the Composition of the Sales Pipeline
- Teams Need to Look for Signs of Misalignment & Provide Feedback
- Shifting Majority of Sales Motion to a Target Market Can Take Time in a Long Sales Cycle
Effectively targeting and pursuing segments of customers or prospects is foundational to salesperson and sales organization success.The concept of targeting is simple and based on equally simple “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 leads the targeting effort by providing a technicolor view of the best customers or prospects where sales should focus their time. The example below is straight-forward as it gets.
Example Target Market Definition
If the sales team buys into the target market definition, you would expect 80% (or more) of the sales pipeline to comprise target market companies. However, more often, we see sales pipelines 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 the pipeline more like figure B on the right.
Figure A – Expected Sales Pipeline Composition
Figure B – Actual Sales Pipeline Composition
The cause of the misalignment between marketing’s direction on the target market and the sales team pipeline composition can be addressed by the following:
1. The CRM Must Identify the Target Market Account
The CRM must identify the target market account so both marketing and sales have visibility to activities and outcomes. The sales team needs to see marketing’s initiatives at the account and contact level, while the marketing Team needs optics on the composition of the sales pipeline.
In our view, the sales pipeline’s composition 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 Sales Leadership Team Should Regularly View the Composition of the Sales Pipeline
The leadership team should regularly review the composition of the sales pipeline by asking the question, “what portion of the sales pipeline is comprised of the target market?” No proportion applies to all companies and industries, but about 75% of the sales pipeline should be sourced from the target market.
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 not had enough experience selling into the target market and requires additional training and coaching?
Regardless of the potential barriers to penetrating the target market, both marketing and sales leaders need to 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 not provide the tools or materials needed to engage with the target market successfully.
4. Shifting Majority of Sales Motion to a Target Market Can Take Time in a Long Sales Cycle
Sales leaders may be focused on hitting sales goals, regardless if they come from the target market or not. Shifting the majority of the sales motion to a target market can take time when there is a long sales cycle.
Regular pipeline reviews and coaching sessions have proven to drive a significant impact on sales performance. If sales leaders consistently work with their sales teams to improve target market penetration, the results will come. 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.