Developing Buyer Persona for More Effective B2B Lead Generation
by Mike Khorev
Challenges in Targeting Ideal B2B Prospects
Building a B2B buyer persona has several crucial differences when compared to the B2C environment, which can produce unique challenges.
Here are some of the crucial areas to pay attention to, which we will also address one by one throughout this guide:
- B2B higher-ups tend to adopt a more conservative point of view, that usually opt for a wide-net marketing strategy instead of specific targeting.
- In B2B, our target customers are companies or organizations, and there can be more than one decision makers with different roles and pain points. Each will need a specific buyer persona.
- Nobody really knows where B2B prospects are coming from, and so it can be difficult to create a lead generation strategy even after we’ve defined proper customer profiles.
To really answer these challenges, B2B marketers must really understand the key benefits of targeted marketing campaigns. With that, we can develop a proper lead generation strategy and convince the bosses to shift to highly-targeted campaigns.
The Truth About Customer Retention VS Customer Acquisition
What actually costs more? getting new customers or retaining existing ones for repeat orders?
Many studies have suggested that customer retention is (significantly) more profitable, with a huge claim that increasing retention rate by just 5% can increase profitability as high as 95%.
So, it’s pretty clear, right? If you want to increase profits, then customer retention is the way to go, as it can cost 500% more to get a new customer than to retain an existing one.
However, it’s no secret that generating leads—that is, the effort to acquire new customers—remains one of the most sought-after goals for any marketers, B2B and B2C.
After all, the number of acquired customers is one of the metrics most commonly related with business growth.
Yet, it’s important to understand that your project to acquire more customers shouldn’t neglect—or worse, push away— the efforts to maximize retention.
It’s important to understand that growth should consist of both customer acquisition and customer retention. Yes, you might acquire a customer, but if that same customer cancelled their subscription or doesn’t make any repeat purchase, you don’t really achieve growth.
With that being said, understanding your ideal buyer persona should help in both customer acquisition and customer retention strategies. The better you understand a certain segment’s pain points, the better you can build lasting relationships.
What Is an Ideal Buyer Persona?
Simply put, a buyer persona is a fictional representation of your ideal,perfect audience, which in the case of B2B: a business or an organization.
The buyer persona is a full description of this hypothetical organization, describing all the necessary details including how they might get value from your products/services, and how they can provide significant value for your business.
So, it’s the perfect model of a customer you’d want to get in your lead generation efforts, and those you’d want to retain at all costs.
Remember, however, that your relationship with the buyer persona should be beneficial in two-way: you have to deliver value to them, and they to you. If it’s only one-way, the relationship won’t be sustainable.
How To Build B2B Buyer Persona
Step 1: Information Gathering Process
We have two options here.
If you already have a significant number of existing clients (let’s say, more than 10 companies), then gather all information of these companies.
If not, for example if you are a brand new business, then pick at least 10 potential companies that might be your customers. You can, for example, list the customers of your competitors.
Collect as much information as possible and write them down (i.e., create a dedicated spreadsheet). List down basic information such as:
- Their organization size
- How long have they been in operation (stage of the business)
- Company culture
- The different decision makers, their roles and backgrounds
If you are using data from existing customers, there are more information you can gather, such as:
- The total cost of acquiring this customer (Customer Acquisition Cost) compared to the total revenue they’ve brought
- Whether they’ve made any referrals, and how many
- Their influence in the market (i.e. whether other businesses are likely to follow their step in buying your product)
Identify patterns, and re-check the data if there are any information gaps. The goal in this step is to list out as much information as you can and present it in an organized record.
The more organized and complete your list is, the better we can execute this next step.
Step 2: Analyze The Data To Make a Description
In this step, our main goal is to understand who our perfect customer is by analyzing the data.
Find patterns, correlations between variables, and similarities on these following factors:
Demographics Data: size of the company, the company’s position in the market and supply chain, number of employees, revenue size
Behavior Data: time required between touch points, their purchase patterns, their problems and pain points, their goals (current and previous)
Company Culture: their branding, offline and online presence, traditions, what they are known for
Look at overlaps in data between different companies, but aim to be as objective as possible instead of relying on assumptions.
For example, you might find out that 4 out of 10 of your customers have revenue sizes between $1 million and $3 million, this might be an indicator.
Also, discuss this data with key people in your company, especially those that often interact with customers. They might have useful insights about your existing clients.
Here are some of the key questions to ask when analyzing this data to describe a buyer persona.
- What’s their most important reason to purchase your product/service?
- What’s the most possible reason preventing them to buy your product/service?
- What makes your brand/specific offer appealing to them?
- What benefits would they get with your product? What goals do they want to achieve with your product/service?
- How are their previous/current approach in achieving this goal?
- Why did they decide to pursue this approach? What was the possible decision-making process?
- What is the main issue with their previous/current approach?
Step 3: Defining Three Customer Circles
In practice, we won’t always get the prospects and customers that are the perfect fit to our ideal buyer persona. Thus, we can divide three different customer circles into three different buyer personas:
1. The Best Customers
This is the perfect, most ideal customer for you, and you value their business as much as they value your service. Your pricing and their budget are a good match with each other, so they won’t have any issue in buying your product/service.
2. The Near Best, Near Ideal Customers
Those who fill a lot of your ideal customer criteria, but fall short in one or two aspects. For example, they might have several decision makers, some of which might not agree with investing in your product, even if they can meet your pricing comfortably.
3. Opportunistic Customers
These are the customers that have transactional relationships with you, but they don’t have any real relationships with and loyalty to your brand. Meaning, if a competitor launched a cheaper alternative to your product, these opportunistic customers won’t hesitate switching. They only look at your business as a valuable opportunity.
So, how should we approach these different groups? First, define these factors for your “best customers” group:
- The company size: revenue size, number of employees, number of locations, etc.
- Special conditions/prerequisite: for example, if your product is a WordPress plugin, then using WordPress is a prerequisite.
- Ideal customer industries
- Precipitating events: for example, if you are selling chatbot service, companies that just made the commitment to improve customer service are more likely to look for your solution
- Typical stakeholders in the buying decision: sales VP, procurement, IT manager, etc. depending on your product/service and niche.
After you’ve figured out all these details, move on to the “near ideal customers” group. Figure out the attributes that are similar to your “ideal customers” group, but note those that chance, and how significant is the change.
Then, figure out the key attributes that might shift this group into an ideal customer, and on the other hand, the factors that might shift this group into an opportunistic customer.
For example, this “next best customer” might turn into an ideal customer if they have a slightly higher budget (then you might want to offer them discounts).
In general, you wouldn’t want to specifically target opportunistic customers in your marketing efforts. They tend to be unqualified leads, and might waste your time and resources.
Step 4: Write It All Down
Now that you’ve (hopefully) figured out all the necessary information, write everything in a concise description for your buyer persona.
Create a template listing all basic information and in-depth information like we have discussed above. Make sure it’s easily customizable, you might need to add new information along the way as you execute your marketing and sales efforts.
Step 5: Describe Key Decision Makers
As mentioned, the key difference between B2B and B2C buyer persona is the number of stakeholders—purchase decision makers—-. You should’ve figured out these different decision makers on the very first step above, and here you’ll need to also describe them.
Different stakeholder roles might have different behavior, pain points, and preferences. You might need to develop different marketing tactics for each of them.
Again, list as much information as you can, but be prepared to add more information in the future.
Now that you have a full, in-depth description of your buyer persona(s), you can create a better lead generation strategy to go where the stakeholders and decision makers are and start capturing their attention.
You can, for example, use a targeted content to target the keywords they search for. Every marketing effort will be more effective the better you understand your audience, and target lead generation tactics will produce better cost-efficiency.
June 6, 2020