“Who are the best type of clients for my business?” It’s a question everyone responsible for sales at an organisation asks themselves at some point. And it’s easy to see why. Knowing which prospects have the potential to not only start working with your company but stay with you for a long time is invaluable. It means you can prevent wasted time, effort and energy on clients who just aren’t suited to you.
But how are you able to tell what your ideal client looks like? An ideal client profile should be based on your current best clients, determining what attributes all of these best clients have in common.
Download our template to find your best clients, and take the first steps to creating an ideal client profile today.
Benefits of an Ideal Client Profile
So why create an ideal client profile? The reasons are numerous, but here’s three convincing reasons why knowing who your ideal clients are will benefit your business, how to go about identifying your current best clients plus a free template to find out who they are!
1. It Prevents Issues Down The Line
It’s an issue that many businesses encounter all too regularly, particularly in the B2B service industry. You’ve gone through the sales process, been to meetings, thrashed out a contract and signed on the dotted line, and finally – you’ve won a new client! Happy days!
But gradually, little problems start to rear their head.
You might find out that your technology isn’t compatible with the clients. They might keep having to stop using your services for periods of time due to budget constraints. They might even have their own methods and processes that they’re insistent on following, even though they’ve hired you because you’re good at what you do.
It’s nobody’s fault, but it happens. Sometimes two organisations just aren’t a good fit for each other. But using an ideal client profile can help you identify and filter out these type of problem clients early in the sales process.
Whilst we all want to win new business, we don’t want to invest the time and effort in winning it from clients who won’t last the course.
It’s much better for you and for them that you flag this up early. Then they can look for a vendor more suited to them, and you can concentrate on the clients who’ll provide real ROI.
2. It Lets You Produce Better Buyer Personas
Buyer personas are the cornerstone of a modern lead generation strategy. Whether you’re approaching your leads using outbound prospecting, social selling, inbound marketing or a combination of those, knowing as much as you can about the actual people who purchase from you will directly benefit your sales efforts.
You’ll probably have a fairly good idea of the job titles your business should be targeting from Marketing Directors and Heads of IT, to CIOs or HR Business Partners.
But not all prospects who have your target job title will be a good fit for you. Some may be at a company that, based on your experience, is too small to work well with you. Some might be working in a sector that your business traditionally isn’t suited too.
So to create buyer personas that are really going to help you connect with the prospects that matter, create your ideal client profile first.
That way, you can eliminate ‘bad fit’ companies, and only base your buyer personas on job titles at the kind of clients you want to be working with.
3. It Helps You Create Better Content
If you want to win business from a particular type of company, you should create content tailored to that company.
Really, it’s a circular process. You find out what content your ideal client profile likes to consume. You create content based around their preferences. And through that content, you end up getting leads that are much closer to being your ideal clients.
You don’t have to have a fully-fledged content creating machine, churning out 50 pieces a week. A recent survey found that almost half of buyers only consume 2-5 pieces of content before they make a purchase decision.
So in essence, it’s more worthwhile using your ideal client profile to create high-quality, targeted content. The kind that your perfect prospect will read, find worthwhile and be prompted to get in touch with you.
How to Find Your Best Clients
Your ideal client profile should be based on your current list of best clients. By looking at that current list of best clients, you can identify commonalities and shared attributes that you might not have noticed. For example, they could be concentrated in a certain geographical location. They might all fall within a particular turnover bracket, or work in the same industry.
Identifying these factors will help you to create an ideal client profile, and your aim is to win business from companies who align closely with this profile.
Often you may think a particular client is a really good fit for your business when in reality they aren’t. Despite the fact that you like them personally, when you crunch the numbers they don’t spend as much as other clients, it took a long time to get them on-board, and they are a lot more demanding.
Only when you’ve found the clients who are keeping your business in business, should you consider other more factors, like how easy they are to work with, how good the communication is, etc.
Taking into account both quantitative data, and your own personal feelings will help you work out which clients give the best boost to your bottom line, but also give you that warm fuzzy feeling inside. So let’s work out what you need to know, in order to make a list of your top 10 clients.
There are three main statistical benchmarks that will give you a good idea of who your best clients are from a financial point of view. These are:
- The median or average spend of your clients with the business per month
- The median or average lifespan of your clients with the business
- The median or average sales cycle – the time it takes your clients from the point of first contact, to signing the contract
This will enable to you essentially split your clients into an upper and lower tier in each category. So the 50% of clients who spend the most money with your company, the 50% who stay with your company for the longest time-frame, and the 50% who signed up with you in the shortest period of time.
Those clients who rank in the top half of all three categories should always be included in the list of your best clients, making up between 2 and 6 of your best clients. If you have more clients who fit in the top half of all these categories, consider raising the benchmark. For example, raise the threshold to clients who are in the top 40% or 25% of the three categories.
Mean or Median?
Why have we included both averages (means) and medians?
The median should be used if your company has a smaller client base, especially if the results are skewed by certain outliers. For example, if all but one of your clients took 3-6 months to sign up with your business, but one just happened to agree a deal in their very first meeting with you.
Using averages, this outlier would skew the data, so by using the median result, the middle result when all data is ordered from highest to lowest, we can get a figure that is more representative.
However, if your company provides services to hundreds or even thousands of customers or clients, the size of the data sample will mean that an average result is more effective and more accurate.
A Brief Example
To demonstrate, here’s a very small sample from a marketing company, let’s call them – ‘Kick!’
Kick! currently have 26 clients conveniently ranging from Company A to Company Z, and they would like to know which of those clients are most valuable to the business. Due to the small number of clients, they’ve decided to use median figures, to work out the benchmarks that they should be measuring their clients against.
Benchmark 1 – Monthly Spend
You can see in the image below, Kick! have listed their clients in order of the monthly spend with the company. Company J spend the most per month – £12,000, whilst Company S spends the least.
Listing their 26 clients in order of monthly spend, the middle result falls between Company X and Company M. Both of these clients are spending £5,000 per month, so our median monthly spend is £5,000. Now Kick! know when they’re looking for their best clients, they’re looking for the clients that are spending £5,000 per month or more.
Benchmark 2 – Lifespan with the Business
In our second image, you can see that the process has been repeated, but on this occasion Kick! are measuring how long each client has been working with them. We can see that Company H have been working with Kick! for the longest period of time, 23 months, whilst Company X and Kick! have only been working together for one month.
The middle result in this instance falls between Company W at 11 months and Company M at 10 months, so the clients that should be under consideration for Kick’s best clients list, are ones that have been working with the company for 10.5 months or longer.
Benchmark 3 – Length of Sales Cycle
The image of Kick’s third benchmark shows the length of the sales cycle for bringing a particular client on board. In other words, how long it took a client to sign up with the company, from the first point of contact.
We can see that whilst Company E only took 1 month to sign up and start working with Kick!, Company D took 11 months. The middle result lies between Company V and Company O, giving Kick! a median sales cycle of 6 months. We now know that Kick’s list of best clients should include those who signed up with the company in 6 months or sooner.
Who Fits the Criteria?
So, to start narrowing down who their best clients might be, Kick! would include clients that either spend £5,000 per month or more with the business, have been with the business for 10.5 months or longer, or signed up as a client within 6 months of initially contacting the company. Any company fitting into one of two of these categories would go onto a short-list to be narrowed down further.
If a particular client happens to meet all three target benchmarks, they should automatically be put onto your list of best clients, as they spend more money, they’ve been working with your business for a longer period of time, and they signed up with you in a shorter period of time than most of your other clients.
For Kick!, we can see that Company T, Company Y and Company E fit into all three categories and would go straight onto the best clients list.
These three companies are good for Kick! to base an ideal client profile on, they all signed up with the business quickly, have been working with them for a considerable period of time, and spend a decent amount of money with the business.
You now should have at least some of your list of top ten ideal clients filled in. But we have 10 best clients slots to fill, so how do you go about finding out which other clients should go on the list?
So far you should have worked out which clients who are in the top 50% for all of your three main benchmarks. For Kick!, that’s Company T, E and Y.
Now list out all the other clients who are in the top 50% for either two or one of the benchmark categories. What we’re going to do now is assign points to the companies based on how many of the different criteria they meet.
You can see from the image below, for Kick! there are 10 of their clients who either meet two of the main benchmark criteria.
All of these clients will now receive two points.
There are also 10 further clients who have met one of Kick’s benchmark criteria, and they’re shown below.
These companies will be awarded one point.
Now, what we’re going to do is dig down and find the qualitative, human factors that make for an ideal client, and then identify which of the remaining clients meet most of those requirements, as it’s not all about how soon they sign up, or how much they spend. We should also consider five further questions.
Those questions are –
- Which of these clients provide good feedback and communication?
- Which of these clients pay in a timely manner?
- Which of the clients do you have a great relationship with?
- For which clients is the work fulfilling?
- Which of the clients do you deliver a good ROI for?
Take each question, and find the clients that match the criteria. Then, see which clients essentially tick the most boxes for you and your business.
Here are Kick!’s examples for you to see what we mean.
As you can see, many of Kick’s clients have different positive qualities that make them worthwhile to work with.
What we would now do is assign points to each company depending on how many of these categories they appear in.
Combining those points, with the points assigned earlier for meeting either one or two of the main benchmarks, means we can produce a table to identify which clients should take up the remaining slots in our list of the ten best clients.
You can see Kick’s list below.
Based on this table the remaining slots in Kick’s list of their ten best clients would be Company F, V, I, P, D, N and one of J, Q, A and W. Kick! have decided to use Company W as they are receiving a good return on investment for the services Kick are providing to them.
Kick! now have a list of their ten best clients, based on both the benchmarks that are most important to the business, and also the human metrics of much they like working with those particular clients.
Once you’ve compiled your list of best clients, it’s time to look for common factors or attributes that those companies share in order to create an ideal client profile. Consider the size of the company in terms of employees or turnover. Are they concentrated within a certain geographical area? Do they work in a similar sector, tech, retail, or finance for example?
Gathering this information will help create a well drawn out ideal client profile for your business, and enable you to clearly focus your marketing, sales and content creation to cater for that specific target profile, leading to more a more valuable, profitable and sustainable client base.