Buyer Persona can make an impact
A lot of times we are asked the question, “Can building a Buyer Persona make an impact on my business?”
Of course, the answer we reply is “Yes.” However, it’s hard to understand sometimes as an abstract concept and it can help to understand with a few real-life examples. Here is one such experience I personally had that really did make an impact.
I was working at a technology company and we purchased a company to get us into a new networking technology standard protocol. It was the up and coming future of networking. Everyone was going to switch to it in the next 5 years. 100%. Currently only about 5% of the companies had switched. And most of them had purchased the product from their incumbent computer provider, the dominant player in the industry at that time. We thought, hey this is great, we’ll attach the other 95% that haven’t converted yet and we’ll beat the giant to the customers. Being a small company, we only needed to hit a few fractions of a percent each year and that would be a giant win for our goals. We geared all of our marketing and sales efforts, outbound and inbound, to that prospect in the 95% non-converted.
Here’s what happened.
We made some sales, but we were not getting nearly the amount we needed, which was troubling. Everybody asked why.
So, we did a win-loss analysis. A soul searching honest evaluation. To do this, you need data, from your sales funnel. On wins and more importantly in this case, the losses. We mostly won deals on price, discounting against the competition. We really spent a lot of sales team’s time on smile and dial, and on-site education and training. Sales was asking for more account executives, more sales engineers, more training material, create a whole training department.
Here’s what we found.
Of the opportunities we made in the 95% non-converted category, we closed 1 in 50. That’s right 2%. And we found that the close cycle was a whopping 6 months for those 2%. Not to mention, selling at a lower price. We also found that we were spending the 6 months on the 49 of the 50 we lost wasting time and resources. When we did some qualitative analysis, talked to the sales team and customers, we found 2 trends. First, many of the prospects wanted educated on the new technology and they sucked up all our time educating them on how it works. And even after that, many were still apprehensive and not ready, or worse, they said thank you, and wend to the incumbent provider to buy it. This was safe for them. Secondly, many prospects were simply not ready, either emotionally or financially, to make the leap to the new technology. We would get a response like this. Thank you, please come back in 6-12 months.
We did uncover another very interesting fact. We, accidentally, encountered and sold to one of the 5% of customers who had already converted and with the incumbent provider. The close rate was 1 in 2! That’s correct, 1 in 2. A 50% close rate. We also found the close cycle was roughly two months. We sold almost all deals at list price, no discount. What was going on here? How was this happening? This is not what we targeted. We asked the sales teams and customers we won, “Why did we win? Why did you choose us? Why would you switch from the incumbent to little old us”. Here was the answer. Our product performed better. Not by a little, but by a lot. It was more efficient. The incumbent’s product cased them to have to purchase all new computers (and these were expensive mainframe computers). Ours did not. So the value to them was the cost avoidance of a large computer upgrade. It had nothing to do with our price, our position in the marketplace, and any other bell and whistle. Just the performance.
So, here’s what we did.
We made 2 buyer personas. One called Performance Pat, a prospect who already converted using the incumbent vendor. The other Newbie Ned, one who had not converted yet.
Performance Pat was either ready to buy, because they already had the pain, or could be convinced quite easily with some customer testimonials, white papers, and eventually we created a free trial mechanism (nothing shows performance better than a head to head competition). All the marketing and sales for Performance Pat, was geared around this concept. We obtained the list of customers that installed the competitor already. We targeted directly to them, to the places they visited and trusted, and their influencers.
Newbie Ned we thought was still worth working with, it’s just that they would need more missionary work and time. We addressed this by creating Marketing around education. We often used resources from others, not everything had to be created by us. And we could nurture Ned, being there as a trusted advisor until they were ready to make the plunge. We did not spend sales team time until they were ready to go. Then of course we utilized the programs we used on Performance Pat since that was still a really great reason to buy our product.
Here was the result. Sales increased dramatically. Marketing provided only qualified leads, already purchased or ready to go. Better yet, performance per sales rep went through the roof. The productivity literally increased tenfold. Who wouldn’t want their sales team productivity to increase by 2 let alone 10? We exceeded all of our business plan expectations on sales, and actually had to increase our installation team size. That was a great problem to have as they say.
In addition, as more of the 95% of the customers converted, largely in part to marketing and sales by the large incumbent, they encountered the same performance problems, and in searching for a solution, kept landing on us. We converted them to Performance Pats!
Did making Buyer Personas make a difference at our company?
You bet it did! Did it cost us anything? Yes, a little time, effort, and cooperation between marketing and sales. No out of pocket cash expense. Did we need to hire an expert to do it? We could have, but really didn’t need to, we had everything we needed including the ability to analyze. Lastly it took courage, by the company leadership and entire team. Courage to perform the soul-searching effort to analyze and more importantly craft a new strategy and commit to execute on it. Don’t be afraid to do it. Make the effort. While it may not turn out like our story, it will always provide some nugget of knowledge and suggest changes you can make to your strategy to win.
