The choice of potential customers is the first step of an active customer acquisition strategy. In the following post we are going to analyze the role of data analysis and intuition in the process of research and selection of commercial targets.
Operational premise: conquest and exploration
Before examining in detail the topic of this post we believe it is interesting to reflect on the starting method of choice of potential customers that are to be engaged in a commercial negotiation. In Vehnta we think that it is possible to begin this process starting from two concepts: conquest and exploration.
Conquest: sailing across a Red Ocean
In terms of choice of the potential targets, the most common approach practiced by companies willing to grow is certainly conquering new shares in the reference market or increasing their presence in the sectors of expertise. It is a process that entails new customer acquisition among the clients of the competitors or among potential customers that are expanding their business.
All of this represents a common practice for marketing and sales people, however it is a game played inside the same perimeter, which does not change the sector as a whole and which only creates friction among the competitors. This is what in the book Blue Ocean Strategy written by W. Chan Kim and Renée Mauborgne it is called a Red Ocean (defined red with reference to the blood that results from competition).
Clearly this strategy is integral part of the development of each company and must not be abandoned. Here in Vehnta we suggest to implement a strategy based not only on Conquest and Red Ocean, but also on Exploration and Blue Ocean.
Exploration: discovering the Blue Ocean
A different choice is, instead, to start from sectors that have not been explored yet: discovering the Blue Ocean, which owes its name to the fact that it is clear and without blood color due to conflicts. Obviously, inside the economic macrocosm, this means that another industry will lose clients whereas the considered sector will acquire new customers.
Certainly also the economic situation, intended as growth or recession, as well as the competitive advantage that each company can put in place to play its match on the market, see our post From strategy to customer acquisition, join the match as protagonists when talking about new business development. However, these are other complex variables that we will not address in this post.
Coming back to the main topic, as Vehnta we suggest following both the strategies, to track one’s own route for both Red and Blue Ocean: as they were two parallel tracks.
As defined, a B2B commercial campaign should start from the choice and the definition of its potential customers: from drawing up a list of them, starting from the most suitable targets up to the potential customers that seem more complex to acquire, but which could result in a more important satisfaction. Data analysis is integral part of this process and has to be implemented before and after the drawing up of the list of the potential customers.
Preliminary data analysis: drawing up the list of potential customers
Data can be very useful to draw up a list of potential customers. Studies, analyses and whitepapers can indeed be a source of information from which to understand which companies could need the offered services: starting from their future plans or from their critical issues. To collect information about the companies helps us to cluster them and to look for a common solution in order to propose an offer.
It is a scientific and analytical activity that presents difficulties in the phase of data collection and as regards the creative ability to understand the situation.
Analysis of each company: confirming the list of potential customers
Once the list of potential customers has been structured it is time for confirmatory data analysis. It is indeed necessary to understand if each company on the list has the right features in order to be contacted.
This phase, which is a more back office stage than the previous one, involves analyses of economic-financial and structural-organizational situations of the companies, along with specific analyses depending on the type of business. This is a phase where collaboration and exchange of views among departments are an essential part of the activity. Indeed, it is necessary to understand if the considered companies have had previous relationships with the selling company.
Once the list of potential customers has been defined together with the customer, it is time to find the right interlocutors and to envisage the purchasing system. There are different sources and different software that help to identify the most appropriate people to contact. However, a Trial and Error Method needs certainly to be implemented, alongside the examination of the purchasing process of the considered potential client. Purchasing systems can indeed be very different and each company has its own defined process. During this phase it is then necessary to find the right combination among the elements: to identify the decision makers and to define the chain of command. It is always useful to start from general theory, to know more click here Analysis of Purchasing System, but for each of the analyzed potential customers it is necessary to examine the people involved in the purchasing process and the connections among them.
The identified purchasing system will then have to be related with the availability variable of the potential customer. This variable is the willingness (availability) to make changes to status quo. With this in mind, it is essential to understand client’s disposition, both disguised and clear: the buyer could indeed be in a state of tranquility (T), improvement (I) or problem solving (P).
Both the improvement (I) and the problem solving (P) phases are ideal moments to propose oneself to the potential customer, because in both cases the company is change-oriented. These two situations differ in the deep reasons that are at the basis of the choice and so the related response times. To increase conversion opportunity it is fundamental to understand if the buyer is looking for an improvement, which will require slower times (for example the optimization of a new technology), or if he or she is looking for a solution to a problem and so response times will be shorter (for example if a machine is broken or a company process does not function anymore as it should). Clearly, the most expert buyers know how to disguise their own state, keeping an apparent tranquility. For this reason it is necessary to collect information about the nature of the request using lateral thinking: indeed, often a direct approach is not efficient.
Buyer in a tranquility state is to be avoided as, considering both the moment and the reasons to change, he or she will hardly be willing to close a negotiation. In this stage the buyer would only wish to avoid problems, but he or she does not have the situation figured out yet. Therefore, only if the target company is in an I or P state there could be collaboration perspectives.
The role of information
As previously mentioned, information plays a crucial role when selecting potential customers. Sometimes these information are available from different sources, as in the case of the creation of the list of potential customers, whereas as far as purchasing system is concerned, information will be heterogeneous: some information will be available in different software, while to define purchasing process and system information will have to be derived from the activities put in place and from the relationships that will have to be generated. As regards unknown variables, as the definition tells itself, it will certainly be harder to achieve a summary. The activity of gathering unknown variables requires to put in place experience and capabilities to conceive a situation, to understand not evident messages and to make the right connections to understand the scenario and act accordingly.
This is why, beyond data analysis, we have pointed out intuition as an essential tool for the choice of potential customers.
The role of intuition
There are many ways to define intuition, but the most accepted definition describes intuition as the immediate knowledge that does not make use of reasoning or knowledge derived from the senses.
Philosophers, psychologists and thinkers have debated on this subject. Nowadays it seems that the greatest experts on the topic are Daniel Kahneman, Israeli psychologist, winner, together with Vernon Smith, of the Nobel Prize in Economics in 2002 and Gary Klein, world-renowned American psychologist who is pioneer in the field of the naturalistic decision making.
An interview, published among the Strategy & Corporate Finance Insights on McKinsey’s blog in 2010 that follows the article signed by the both of them in 2009 for American Psychologist, perfectly defines their views on the subject.
Daniel Kahneman, just like the scientific community to which he belongs named HB (heuristics and biases), is conscious of the existence of capabilities and expertise, but tends to focus on the defects of human cognitive performance, thus warning against intuitions. Gary Klein, just like the members of the NDM (naturalistic decision making) community, is instead aware that professionals are often wrong, but he underlines the magnificence of the success of experts’ performance.
For both academics we invite you to read their essays and articles, but in this case we would like to dwell on the reasoning of Klein concerning how experience can help intuition. His thinking leads to a crucial conclusion: if two conditions occur at the same time, then intuition becomes a very powerful tool. These conditions are that qualified intuitions will develop only in an environment characterized by sufficient regularity, which provides interesting insights for the situation or for similar situations, whereas the second condition is that there must be an appropriate opportunity to catch relevant signals and to apply the strategy or strategies previously learned.
Applying intuition to the choice of potential customers
Coming back to the main topic, when talking about applying intuition to the choice of the potential customers it is not academic speculation, but it is instead a process that involves business decisions and transactions.
As previously defined one of the aspects that, according to the latest studies, guides intuition is experience acquired over the years. This is true also for new business and customer acquisition activities: therefore also for the choice of potential customers.
Having explored new sectors or having conquered new companies is certainly an advantage. The concept of experience applies not only for logical and deductive reasons but, in detail, as ground for intuition.
Data analysis and intuition: an operational summary
As said, data analysis helps to take the first steps in the choice of potential customers. It indeed helps to define a starting list. The second step to define the targets is instead more linked to intuition. The first part is pure logic while the second part of intuition given by experience can make the difference.
These are certainly interesting topics connected to a new way of doing business, which is more specific and result-oriented. Maybe, however, the most beautiful definition of intuition is the one of Clarissa Pinkola Estès, writer, poetess and psychoanalyst.
“With intuition we are like the starry night, we gaze at the world through a thousand eyes”
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