In the realm of B2B marketing, achieving success goes beyond mere innovation and cutting-edge technology. The crux of a high-performing B2B marketing strategy lies in answering a fundamental question: Do you truly comprehend your most valuable customers and where to discover more of them?

Harnessing Customer Profitability

Each company possesses a select group of target customers who resonate more profoundly with their value proposition, crave expedited solutions, are willing to invest more, and exhibit long-term loyalty. This forms the cornerstone of successful marketing. The task of B2B marketers is to pinpoint this exclusive cohort, allocate resources disproportionately to attract them, and optimize relationships with them.

Our team, since 2015, has conducted impartial primary research on account-based sales and marketing strategies, unveiling insights into what sets high-performing programs apart. Notably, 63% of these elite performers employ data-driven rationale for account selection, a key determinant of revenue impact.

Analyzing Customer Portfolio

A deeper examination often reveals stark profitability disparities among customers. Approximately one-third contribute all profits, while the middle 50% break even, leaving the bottom 20-30% to consume a significant portion of profits. These are the clients demanding steep discounts, posing onboarding challenges, and draining resources.

The crucial revelation is that not all customers are created equal, and not all revenue is inherently profitable. Without a meticulous analysis of customers and a thorough understanding of the “ideal customer,” scaling efforts may lead the company into a metaphorical brick wall.

Enhancing Your Ideal Customer Profile

The top-performing third of customers, coupled with a segment of the middle group, closely aligns with the ideal customer profile (ICP). The implication is profound: by identifying and prioritizing high-value customers, B2B marketers can significantly amplify the success of their investments.

These top-tier customers not only bring substantial profits but also streamline the marketing process, leading to faster closures, shorter onboarding times, and reduced complaints and resource consumption.

Move Beyond Total Addressable Market (TAM)

Forget the conventional Total Addressable Market (TAM) approach, which includes all companies that could potentially pay. The Ideal Customer Profile (ICP) distinguishes itself by excluding profit-sucking targets that must be avoided.

A Roadmap to Success

Despite the transformative impact of customer portfolio analysis on ideal customer targeting, many B2B marketers overlook this crucial aspect in their endeavors. The pitfall often lies in prioritizing innovative tactics and technology over understanding the customer base.

Here’s an alternative approach to consider:

Customer Identification

– Clearly categorize your existing customer base, looking back at least three years for insights into product purchases, renewals, average contract value, and other success indicators.

– Identify decision-makers, the decision-making process, and influencers.

Differential Profitability Analysis

– Identify the top-performing customers and understand their characteristics.

Define Your ICP

– Identify characteristics of the top-performing customers and locate additional targets resembling them using firmographics and technographics.

Segment Your ICP into Cohorts

– Group companies and personas with similar traits, facilitating targeted content creation and program alignment.

Iterative Refinement

– Implement an iterative refinement process, continuously analyzing customer data and adjusting marketing strategies accordingly.

Understanding the Static Nature of ICP

While your relationship with a company is dynamic, the Ideal Customer Profile is a static construct. Although accounts may be added or removed over time, the fundamental principles remain unchanged. This is crucial for targeting and measurement.

Analyzing Your B2B Customer Portfolio for Optimal Profitability

The journey to B2B marketing success begins with a profound understanding of your best customers and how to attract more of them. By delving into customer portfolio analysis and acknowledging the nuances in client profitability, B2B marketers can chart a course for targeted and genuinely impactful programs. Elevate your ideal customer profile, and unlock the untapped potential of your target market.