Looking for prospects: profiling to understand their value and potential

by Alberto Aleo

Who are our clients and what does profiling them entail? How do we investigate the potential of a possible client that we have yet to meet? In a previous article some time ago we defined the potential of a client as the sum of the turnover that they could develop if they bought directly from us, plus that generated indirectly (by providing positive references). But what should we consider to obtain such data?

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We also indicated that the potential is, in fact, closely linked to financial reliability: a customer that could be worth a lot but does not pay promptly or is an unreliable payer is not a good interlocutor.
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When assessing potential, bearing in mind the differences between sectors and focusing mainly on the B2B markets (those where the clients are other companies), we consider the KPIs (key performance indicators) that are obtained from the following:

• size of the social network to which they belong;
• number and types of customers served by my client;
• profession or business sector;
• frequency and average value of purchases;
• other suppliers used by them;
• revenue or turnover;
• geographical location;
• payment behaviour;
• preferred element of our offer;
• type of interlocutor and his/her decision-making power;
• number and value of estimates requested.

When you select an indicator, consider not only its ability to provide you with client information but the reliability and accessibility of the source and the measurability of the data. For example, requesting the financial statement of a prospect from the chamber of commerce might be complex or anti-economical, even if we could obtain important information by doing so. Moreover, including the level of reliability of the interlocutor with whom we are negotiating among the KPI would provide qualitative information that is limited or impossible to measure.

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If the time taken to retrieve the information is so long that it creates an actual ‘management cost’ or the resulting data are not quantitative, such an approach is not feasible.
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Personally, I distinguish between two types of sources: the internal ones that are automatically available in-company such as the analysis of the past sales data or information available from other departments, and the external ones that require a series of direct questions to the client or requests to other organizations. A useful way to identify the characteristics of a client with high potential and verify the effectiveness of your KPIs by adjusting them to the real opportunities that your organization can pursue, is to study the best clients you already have: what recurring parameters can you identify by observing them? What is the lowest common denominator that they share? In many cases, it will be enough to find similar interlocutors to ensure commercial success.

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Once you have decided on your KPIs, you will have to use them to assign a potential value to the prospect, refining the search further as you increase the knowledge of your interlocutor.
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Obtaining objective data (even if initially approximate) will allow you to prioritize your activities with new clients, to better target sales forecasts and ultimately to increase turnover. It will also allow you to choose and customize the approach strategies, optimizing the costs of an activity such as that of new business, which is notoriously expensive.

What if you are working in a B2C market and your customers are the end consumers? I will deal with this approach in a future post …

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