Written by: Marcus Erlano, First Circle Sales Head
How do you build a lead generation machine that consistently feeds product market fit leads into your sales funnel? There is no one size fits all solution but experiences will show similarities in approach.
You’re starting to acquire a few customers and are currently waiting for market validation. You observe momentum in their use of your product. You ask why at the tiniest movement you see. At some point, you may have found the holy grail of customer cohorts - product market fit.
You begin to think about scaling and start dreaming of the next turning point. You start to think about 100M in ARR or when your micro brand is acquiring half of its customers at no cost. You also start to wonder how long it takes to get there.
Ideas are running wild. Eagerness to try different things is off the roof. It's tempting to accelerate forward, however, you need to stop on your tracks and analyse the information in front of you.
Let's start with defining product market fit.
Startups are familiar with this term, but if you’ve stumbled upon this article and have never heard of it, it’s one of the industry terms you'll find to be very ingenious in concept. The first thing that you need to understand is ‘being product market fit’ has a wide divergence of attributes that evolve throughout the life cycle of the company. Leads considered product market fit in 2018 may not be the case in 2020. The approach to finding product market fit is an iterative process that requires constant re-discovery.
When I started with First Circle, the target market was SMEs with bridge financing requirements. Simple and straightforward - these are the type of customers my team targeted. We encountered a number of downstream challenges that led to experiments aiming to improve product offerings and maximising distribution channels. In paper, the volume of newly onboarded customers and origination amounts looked good but there were underlying problems suggesting that we were not targeting product market fit leads. We had a number of single use customers, they were customers incurring late payments and we have been receiving a number of poor CX reports.
This allowed us to look at leads generation and selling in a more targeted and focussed manner. We dug deeper into sub segments of the market with tell tale signs of product market fit with the lowest aversion to growth. In the past 6 months, we launched a team that conducted outbound prospecting and improved how we do inbound lead qualification. Now, we are also applying learnings to improve content management and our online application flow. All activities geared towards acquiring and converting the best quality leads.
Let’s segue to the Ideal Customer Profile and buyer Personas. These are concepts key to product market fit lead generation.
Successfully identifying the ‘Ideal Customer Profile’ and the ‘Buyer Personas’ are essentials of targeted and focussed lead generation. A good sales model should be using the ideal customer profile to determine the target company type and buyer persona for the target person.
Let’s say you’re in the Transport and Logistics industry and your ideal customer profile is a business that has big clients and experiences a spike in orders seasonally. One of your buyer personas is most likely the young, independent entrepreneur who likes taking on all orders and meeting customers’ demands right away. After knowing these, you then shift your focus to find where is the best place to find these companies and these people.
You should be, first and foremost, explicit on which companies you wish to target and the persona you should be selling to. Not knowing these is like shooting for the moon, wishing you will land on the right spot. Having clarity on your target profile and persona makes you deliberate on your call to action. These guide your lead generation activities. It drives the messaging of communications, ads, media content and landing pages. As a strategy, this allows us to choose our customers and not vice versa.
How do you build the ICP - Ideal Customer Profile? To start off, basic characteristics to identify are the following:
- Company size - what is the ideal transaction size and profit margins that allows the company to afford our product?
- Industry - which industries suggest usage patterns that fit our product offering?
- Geography - are there regions we do not cater to?
- Legality - are there legal restrictions with doing business with certain business types?
- Product Limitations - do our products guarantee to meet customer demands?
Knowing these will allow you to project exactly who you want to service.
I have provided a sample with 5 characteristics but the list has no minimum or maximum. Having 5 on the get-go is enough. You can build on it as you discover more characteristics along the way. You may then use the predefined characteristics you have set to qualify or disqualify leads.
A deeper look on BP - Buyer Persona; this is a romantic visualisation of the person that best represents your customers - based on motivators, goals and challenges. He may be a semi fictional character we fondly refer to as John - a profit driven businessman who is keen on taking on more projects who needs quick access to cash. Knowing these allows you to create sales scripts, create content and allocate the correct resource that best suit your buyer persona.
One of the challenges that one might encounter with these concepts include the exclusion of prospects that do not fit your ideal customer profile. It requires a changed state of mind that non-ideal customer profiles will just end up not being profitable.
To learn more about personas and communicating well with your target audience, click here.
The other challenge is the pretense of how easy this seems - until complexities start presenting itself. Each time a new characteristic emerges or a job title emerges, the temptation of altering the profile or adding a persona emerges. Do not fall into the trap of looking for differences - instead, look for similarities.
In summary, use these simple steps for a focussed product market fit lead generation:
- Conduct an analysis of your company’s existing customer base. Create a list of the ideal customers - they are usually the ones with standard sales cycles and are generally happy with your products.
- Research and get to know your ideal customer profile. Collate firmographic data and interview to find out their JTBD - jobs to be done and their product usage behaviour.
- Find out your buyer personas. Find out who makes the decision and how to get one. What is the level of awareness of the decision maker and how do they feed on information?
- Re-visit your current lead generation initiatives. Align resources, channels, collaterals and communications on targeting the ideal customer profile and buyer persona.
Food for thought: Your main tools should be your customers, your customer facing team members and your CRM. They allow you to use information to look for trends in how they access and consume your products. These information, in turn, become your guide in generating good quality, product market fit leads.
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