By Brad Douglas, Shipley Associates

A well-defined strategy for determining which sales opportunities to pursue creates sales efficiency and success faster than any other discipline. And yet targeting the wrong customers in pursuit of new business is one of the most common pitfalls for sales professionals. It's a great temptation, but it increases the risk of losing more sales than you win. You can have the best customer relationship management (CRM) or contact management system in the world, but if you're pursuing the wrong business, the system will not benefit your organization.

Even if you have concluded that your product or service is a hot commodity, it pays to have discipline about targeting the right customers.

Focus your sales strategy

Decide early whether your sales strategy will focus on high-risk or low-risk opportunities. The following table rates the relative risk of pursuing new market sectors and existing or new service offerings. Careful analysis of who to target pays off.

Making sure that each sales opportunity fits within your organization's sales strategy and goals improves the chances of your winning the business.

Assess the impact of each sales opportunity

The potential benefits of a sale must outweigh potential marketing costs. The following diagram illustrates how risk and marketing costs increase as sales opportunities increase.

Before you begin targeting customers in your assigned region or territory, ask yourself these questions:

• Is the sales opportunity within our core business area?
• Does the opportunity fit within our strategic plan?
• How might it benefit (or hurt) our existing business?
• Can we win? How or why could we lose?
• What resources are required to win this sales opportunity?
• What is its value to the company?
• What is the risk of not pursuing this opportunity?
• What is the impact of winning?
• What is the impact of losing?

By answering these questions for each sales opportunity, you limit your risk and focus your efforts on pursuing only the most beneficial leads.

Assess competitors

Another critical part of targeting customers is a review of competitors in your market. If potential customers have a strong bias for buying from a competitor, you need to factor this information into your risk analysis.

Questions to consider include:

• Do we know the competitors and their likely approach?
• Is there an incumbent? Is the incumbent already favored?
• Does the customer rely on us or our competitors for input and help?
• To what extent have we influenced the customer's requirements?
• Do we have a competitive advantage from the customer's perspective? If so, what is it?

Depending on the size and strategic nature of the opportunity, you might want to complete a thorough assessment of each customer issue. Rank your solution to each issue against that of each of your competitors. And remember: You are analyzing customer issues from the perspective of the customer, not from your perspective.

In the past, companies typically chased every possible sales opportunity. Those days are over. You must be strategic in targeting your customers and pursuing the right business with the right solutions. By carefully analyzing your customers, market sectors, and competitors, you can develop a successful strategy for winning business.

About the author   Brad Douglas is Vice President of Sales and Marketing with Shipley Associates, a professional services company focusing on sales and business development consulting, training, and process improvement.