NOTES: This is a partner blog created in collaboration with Laura Flowerree, Co-Founder of Telemetry, a Premonio partner. Telemetry provides investment firms and B2B companies with data science-enabled and easy to use talent insights to accelerate decisions, ranging from asset and customer sourcing to commercial diligence and competitor benchmarking.
This new blog deep dives into the first of the six techniques we presented in our September 2023 blog (here) as still working in B2B pipeline generation now, namely “precisely clarifying the Ideal Customer Profile (‘ICP’).”
No time to read the blog? Then watch our 60 second video here.
In today’s rapidly evolving business landscape, mid-stage growth companies are faced with a dual challenge: how to accelerate scaling with a repeatable revenue-generating model and how to sell successfully in an environment marked by fiscal scrutiny. At the heart of this conundrum lies the need for precisely refined Ideal Customer Profiles (ICPs) and the matching value propositions that resonate with both new prospects and existing customers.
In this blog, we will delve into how these challenges are being tackled by the successful Chief Revenue Officers (CROs) and Chief Marketing Officers (CMOs) we’ve been working with, and how this strategic approach has led to tangible acceleration of B2B pipelines – even now. Once ICPs and the associated value propositions are precisely defined, we have seen lead volumes double, conversion rates increase, and opportunity closure rates double and triple.
The logic is compelling: The more you know about who is buying from you and why, in quite a bit of practical, targetable detail, the more you’re pursuing prospects with a higher likelihood of resonating with your value proposition. The alternatives are one-size fits all email blasts, bland LinkedIn outreach or ads, and tele-sales campaigns that annoy more than they attract. None of those work anymore in the current environment. So what can the enlightened CROs and CMOs do to rectify this situation?
Understanding the Core Challenges
The majority of our customers fall into the category of mid-stage, B2B growth companies. Their primary focus lies in constructing repeatable sales and marketing processes and bolstering revenue operations capabilities. However, the larger, more pressing issue is the precise delineation of their Ideal Customer Profiles (ICPs) and the associated, tangible value propositions. In order words, what are the most promising prospects to aim these scalable sales and marketing engines at? Especially in a climate of stringent fiscal scrutiny, identifying and engaging these ideal customers has become more challenging than ever.
CXOs’ Quest for Precision
CXOs are striving to determine who to target with the highest likelihood of success. They are determined not to send their sales and marketing teams on wild goose chases, and they seek ways to expedite opportunities through the opportunity pipeline. The key to this starts with homing in on tighter ICP definitions that in turn drive tighter value propositions:
This means finding more customers with a demonstrated need for your offering.
- Enhanced segmentation for more resonating ICPs (i.e. understand the verticals, company sizes and growth, geographies, installed tech stacks, functions, titles and hierarchies they most likely hail from)
- This implies the need for data sources that contain these segmentation dimensions as well as the ability to reach them through CRM and other outreach methods
- Greater precision in targeting the markets they’re in (both TAM and SAM)
- Identifying segments and companies where your fan base is migrating to (they have bought before, and will buy again at their new companies)
- Swiftly moving away from non-resonating segments to save time and resources
- Shifting focus from average qualification scores to increase the pipeline quality
Customer Benefit #1: Tighter ICP Definition
The primary benefit of a tighter ICP definition is a more focused approach, resulting in:
- More Targets: A better understanding of your target market leads to increased segments that should resonate with your business. This approach can help you uncover untapped opportunities and expand your Serviceable Addressable Market (SAM).
- Easier Penetration: With a precise ICP, you can identify targets that are easier to penetrate within a single company.
- Market Tracking: Knowing where your fan base is moving allows you to target new segments effectively.
- Resource Efficiency: By shifting your focus away from non-resonating segments, you save valuable time and resources.
As a real-life illustration for the above benefits, in the figure below you can see the output of a real customer’s ICP analysis that compares the high-probability segments that exist in the market against the segments being targeted by the existing sales and marketing outreaches. The red and pink segments are the ones where demand could be demonstrated, but the existing pipeline building efforts have left those segments underpenetrated.
Matching your Total Addressable Market (TAM; available market) to your SAM (thus far penetrated market) allows you to align your Sales and Marketing organization to profitably go after specific segments. It ensures that your TAM is sufficiently large to be attractive while not overextending your resources.
Customer Benefit #2: More Compelling Value Proposition
A more compelling value proposition is the key to increasing revenue while reducing costs. This results in higher growth and lower expenses, which is the Holy Grail of business success.
- Higher Growth: A compelling value proposition leads to increased opportunity volume, higher conversion rates, quicker deal velocity, and the ability to charge premium prices.
- Lower Costs: With a more resonating value proposition, you can enrich fewer names and achieve improved conversion and closure rates throughout your sales funnel.
How to Achieve This
To achieve these benefits, a multi-pronged approach is necessary. Leveraging Telemetry’s deep, AI-based analytics and Premonio’s quantified growth planning are vital components:
Telemetry – Tight ICP Definition:
- Firmographic data, which includes geographical location, industry, company size, and organizational maturity
- Demographic data, such as seniority, function, and title
- Psychographic information that gauges digital maturity
- Distinguishing early adopters from laggards
Premonio – Quantified Go-to-Market Strategy:
- Developing a growth plan with weekly KPIs and budgets broken down by lead source
- Optimizing Customer Acquisition Costs (CAC) for each lead source
- Maximizing revenue through budget optimization
- Scalable translation of compelling value propositions into outbound messaging and content
Having precisely defined the to-be-targeted ICPs (and the associated value propositions) then drives the definition of the associated go-to-market strategy as well as the resulting quantification of the achieved revenue and growth targets. The figure below is a graphical illustration of a target go-to-market system and the associated revenue targets broken down by first-touch lead sources.
This comprehensive approach also involves the analysis of funnel stages, the velocity of leads through these stages, and segmentation based on the minimum size required to achieve a positive return on investment.
The Resulting Benefits we are Seeing in the Market
In conclusion, using a tight definition of resonating ICPs with the matching value propositions, and all of that translated into a quantified go-to-market plan that defines growth goals by lead sources, KPIs, and optimized budgets and CAC contribution by lead source will have a profound impact on your B2B pipeline generation, even now:
- More Precise Targeting: Helps you generate more pipeline from precisely targeted ICPs who have a proven need for your offerings.
- Faster Growth: With higher conversion and close rates, you’ll experience faster growth.
- Budget Efficiency: Achieve more budget efficiency by targeting the right customers and crafting compelling value propositions.
In the world of mid-stage growth companies, precision and efficiency are the keys to unlocking success. By defining your ICP and refining your value propositions, you can pave the way for accelerated growth and greater profitability. In an environment marked by fiscal scrutiny, these strategies are not just valuable – they’re essential.