With every company mostly always looking to get new business, we have put together our top 5 tips for you. Deciding on a target group of ideal customers is important so that you can bring greater focus to your marketing strategy and achieve a better return on your marketing budget. After using our top five tips on how to decide whether a customer is credit worthy, you can start to consider how you would target them. Targeting the wrong people can be worse than not targeting anyone. If your company is pumping money into direct marketing for various B2B or B2C campaigns and they are going to the wrong people, they won’t provide any lead generation or return on investment. So it’s crucial- especially for start-up or small business marketing, to get this right. The key to any marketing campaign is accurate data, so identifying this is vital to the success of your marketing efforts to increase sales and revenue.
Consider the following:
- Investigate each group and establish top prospects, using a CRA service to search by SIC code. On our Creditsafe system, it will show that every business has a SIC code that is given to them by Companies House. For example, all electrician companies will opt to be under the same sector and be under the same SIC code. This makes it easier for you to group together companies of the industry and distinguish the top prospects that you should be targeting. The Creditsafe system has also created a prospecting tool for marketing, called Marketing Prospects. By using a tool such as Marketing Prospects you can group together companies in a certain market place using different filters and have a whole list of prospects to target in one place. It gives you the data and information on companies that you can market to, and you can filter them through SIC codes and industries.
- Choose market segments that are fast-growing and have a solid payment strategy. Markets that are fast growing will also benefit your business if you are dealing in them. As the market and profits grow, your company will gain rewards. Certain market/industries also have an average payment strategy- make sure it’s good. Through the Creditsafe system, there is a feature on credit reports that tells our customers how many days beyond terms a company pays their invoices. This allows you to forecast your cash flow projections more actively. We also have an ‘industry average’ Days Beyond Terms (DBT). This gives our customers a chance to see whether the industry is good in general on paying invoices, and if that company in particular is above or below the industry average. A system like this will help you to determine what companies have a solid payment structure and who are reliable to do business with. See the best and worst paying industries of 2014.
- Establish your broad target customer groups in terms of sector, size and location. After you have picked through the companies who are and are not credit worthy, you can then start to group together prospects you would wish to target. For a start-up company, it’s really important not to target too specifically if you can help it, especially at the beginning. Target certain sectors, a certain size of business in a certain location by all means, but don’t be overly picky in who you approach to do business with. Our advice for customer segmentation is to identify your perfect business; a business that would be ideal for your company to do business with, and work outwards from that. As long as a business credit worthy, and meets your main expectations, go for it. It’s rare you will deal with all perfect businesses; you will have to compromise at some point to get business through the door. It’s better to do this first and then narrow it down to a certain niche when you’re a more established business, than to go in aiming for perfection and get nowhere. However, if you are a niche business or a niche market, you may have to be picky, but try to keep it as open as you possibly can within reason when you first start out, this will get you off to a good start.
- Discard prospects with a poor payments record from the marketing programme. This is a crucial aspect to remember, if you’re a start-up company or have a rocky cash flow, you don’t want to be getting involved with companies who have a poor payment record at the beginning. If every other reason for you to do business with them is appealing apart from the payment records, you could possibly modify your cash projections. If not, you could always come back to them when you are a more established company.
- Build a solid relationship between your sales and finance team. When you’re good to go, there is one more thing you need to tick off your list. Your teams need to communicate. If your sales team is targeting a business that the finance team has deemed un-creditworthy, it’s a waste of marketing material, a waste of time, a waste of money and it could cause a bad impression and a bad representation if someone who has been targeted then applies for credit or services from your company and they are turned down. Make sure your teams share information through regular meetings and make sure they know how much each team benefits each other and encourage them to work as a duo.