A Smart 4-Step Formula to Identify B2B Prospect Opportunities
Not all prospects are created equal. Some are ready to buy now, some later, some not at all – yet marketing tends to invest the same in each one, which is inefficient at best.
I’d like to suggest a simple 4-step formula that will bring an early identification of prospect opportunity and allow us to gauge our marketing investment in a prospect per the potential return. The formula is based on the concept of “propensity to buy”, or the likelihood that a given prospect will purchase. Understanding, and measuring this concept enables us to focus on real opportunities.
The Four B2B Prospect Opportunity Pillars
The propensity to buy formula rests on four pillars: source, need, timing and budget. By applying some parameters to each we can assign numeric values. The higher the numeric value, the higher the value of the prospect. These parameters are based on information that you gain through interaction, if not actual conversation, and are in the sequence that the information is usually revealed.
Source is where the prospect came from. It is the first evidence gathered and it is the most important of the four pillars. For instance, the source might be a customer referral, which is enormously powerful. Or, the prospect might belong to an important industry association, or the individual might have dropped out of the sky. Let’s assign three points to a referral, two points to an association member, and one point to the unknown.
Need means exactly that – how does the prospect express their need for your product or service. If its because of a mission-critical need, let’s assign three points. Research for a planned project? Two points. Curiosity gets one point.
Timing is how soon the prospect expects to be making a decision. Right now gets three points. In six months, two points. Sometime in the future gets one point.
Budget. This does not mean we ask the prospect how much money is in their wallet, but we can find out if there is an existing budget, which would get three points; two points if the budget has been requested; and one point if the prospect is still building their business case.
The maximum point score is thus 12 – prospects with 12 points represent the highest potential close ratio. This may be gilding the lily, but It’s worth focusing your resources here at the expense of other groups. Bring the business in now. Ten to eleven points indicates potential, and that you should have a lead nurturing program in place. Eight to nine point prospects are still in the game, but should be nurtured through lower-cost communications. Prospects with less than eight points go directly to the database where they are informed, stimulated, and given the opportunity to express further interest.
The under eight-point pool is the domain of suspects and competitors (if they’re smart). If you’re smart, you make up a suppression list of these competitors so you can find them on the database and get rid of the little buggers.
This scoring model we’ve discussed is directional. It has got to be tweaked to your individual business, and then fine-tuned through experience. I encourage you to keep it as simple as possible, and to regularly purge the system, perhaps every six months. The bottom line is a more efficient prospecting machine, better utilization of marketing (and sales) resources, and a better ROI.
Of course, this propensity to buy model is used at the tail end of the go-to-market process, once the lead generation machine is in full swing. If we really want to work smart, we begin with indepth qualitative research, such as the Prospect Persona process mentioned earlier, so media and messaging are directed at the highest potential candidates.
Additionally, we recommend profiling who is not a prospect. Persona research* we have recently conducted identifies not only ideal prospects (and their consideration path) but also those who may look and smell like a prospect, but are unlikely to ever convert.
Throughout our focus must be on quality not quantity, on working smart.
*For a free copy of our research, The Power and Potential of Persona, please click HERE.
Originally posted on the MENG blog.
International author, lecturer and consultant, Scott has worked with clients in all phases of marketing strategy, research and implementation. Read More