Expert insights for sales, operations, capture, proposal, and marketing pros.
Expert insights for sales, operations, capture, proposal, and marketing pros.
Sales efficiency, defined as the ratio of new revenue in a given period to the amount of marketing and sales spending in that same period, is arguably the most important metric for predicting future growth.
At its core, sales efficiency asks: how effectively is your organization converting resource investments into revenue?
As the economy tightens and a potential recession looms, improving sales efficiency is becoming more important than ever before.
Companies across industries are looking into how to do more with less. Investors are seeking more evidence that potential ventures can efficiently turn resources into revenue. And anxious employees are hoping to maximize their value to help avoid layoffs.
So if we agree that sales efficiency is crucial, the next question becomes: how should companies go about optimizing it?
At Patri, we believe it all comes down to one elusive metric: Ideal Customer Profile (ICP) Fit.
ICP Fit is the quantitative measure of how closely an opportunity matches your ICP. And ICP Fit impacts every aspect of the organization, from how marketing spends their budget, to how sales organizes their time, to how product builds solutions for who they perceive to be their users.
When you have a sharp understanding of your ICP and the ability to assess ICP Fit, everything else falls into place. As Patri CEO Josh Ellars remarks, “When you get ICP right, you’re on a rocket ship. When you get ICP wrong, you’re on a sinking ship.”
Below, we expand on the nine reasons that ICP Fit is the core driver of sales efficiency and discuss how to leverage ICP Fit to optimize your sales efficiency today.
Marketing Spending is one-half of the sales efficiency equation. And without understanding your ICP fit, knowing where to spend your marketing dollars can be like throwing darts in the dark.
But with a clear understanding of which customers and roles you should be targeting, marketing spend decisions become much more clear and effective.
The most effective messaging is crafted with a specific audience in mind. To lay the groundwork for effective messaging, companies need to know the characteristics of the accounts they’ll be targeting, which roles they should target, and which personas within those roles they’d most like to connect with.
Understanding your ICP is a necessary first step to unlock the most effective targeted messaging.
Pre-sales efforts, like cold calls and emails, are expensive, time-consuming, and assumed to have relatively low success rates.
But it doesn’t have to be this way.
By understanding who to target and what messaging to use, pre-sales efforts can be focused on only the best prospects, magnifying their effort.
Many of the best salespeople are charismatic, optimistic, and diligent. These skills help them form connections with all different types of people, sniff out how to open an opportunity that might otherwise be shut, and continue grinding on deals that take a long time to close.
But the downside of these skills is that sometimes sales reps can get locked into continuing to engage with deals that aren’t ever going to close. Because of their charisma, prospects might give them false hope. Because of their optimism, they might hold out on an opportunity that is consuming too many resources. And because of their diligence, they might resist qualifying-out ongoing deals that are already in motion and are unliley to actually close.
For these reasons, it’s essential that organizations have data-backed processes for qualifying prospects before they’re passed onto sales to make sure that sales can use their particular talents for engaging with the right kinds of opportunities.
Understanding ICP Fit is essential to qualifying leads so you don’t overload your sales team with poor-fit opportunities that drain resources and distract salespeople from doing what they do best.
Once opportunities land in sales, continued qualification is essential for determining which deals are moving forward and which are unlikely to close.
A quantified ICP Fit Score can quickly give sales the information they need to know whether an opportunity is worth pursuing or whether it should be qualified-out.
Better yet, some software, like Patri RevFit AI can use ICP Fit scores, combined with your CRM activity data, to accurately predict an opportunity’s propensity to win. By analyzing the ICP Fit Score and the Propensity to Win, your organization’s sales ICs can leverage data to make quicker and more accurate qualification decisions. And RevOps can spend less time on creating custom algorithms to score opportunities and focus instead on leveraging metrics to provide actionable insights.
An average of seven people are involved in every purchasing process. As a result, so much of the battle of sales is making sure you have the right decision-makers in the room.
A keen understanding of your ICP helps sales ICs understand who should be in the room and helps sales managers know exactly how to coach their direct reports.
That’s not to say that meeting with other roles isn’t productive. But by knowing who you ultimately want to get in the room, you can be more strategic about gathering information, scheduling follow-up meetings, and eventually looping the right people into the deal.
A poison pill deal is a deal that seems enticing but ends up costing more resources than it will produce.
For deals with low ACV, poison pills can sometimes take the form of deals that take so long to land, involving so many internal resources and such a long sales cycle, that by the time they finally sign a contract, it isn’t worth the revenue they will generate.
For higher ACV deals, poison pills generally take the form of deals that are either incredibly expensive to service or highly likely to churn before a profit has been made.
To avoid poison pill deals, it’s incredibly important to thoroughly vet opportunities for potential pitfalls before pursuing them. Can you provide the services the prospect is seeking? Does your solution actually map to the prospect’s pain points?
All of these questions seem basic. Yet in the heat of a tough quarter, where everyone is grinding to hit their number, they can be easy to brush aside.
ICP Fit helps sales organizations avoid poison pills by quickly and accurately determining whether deals are likely to be serviceable, profitable, and renewable.
Who you building your solutions for and what are their biggest problems?
This is the key question that product teams ask as they build solutions.
But without a quantitative analysis of the organization’s ICP, this question can be answered with guesswork that can lead teams astray.
Having a clear map of the organization’s ICP(s) is essential to understanding for whom your organization is building. And as a result, product teams are better able to plan their roadmaps to solve the right problems for the right customers.
Boats move faster when everyone is moving in the same direction. Having a clear understanding of ICP Fit helps companies all move in sync toward common goals.
The problem with traditional ICP exercises is that too often the results are siloed in marketing and difficult to quantify when it comes down to specific opportunities. Without the ability to quantify ICP Fit, sales will have a hard time applying ICP to incoming opportunities. And product might have a hazy understanding of the customers for whom they’re building their products or solutions. In some organizations, RevOps might try to build an internal solution to score opportunities, but the effort is often time-consuming, difficult to visualize, and rarely informed by advances in machine-learning.
But with the ability to apply machine-learning powered ICP Fit scores across opportunities in the pipeline, everyone, in every department, can get on the same page. And as a result, the whole company will operate more efficiently, optimizing marketing and sales investments and boosting sales efficiency.
Understanding ICP and being able to quantitatively apply ICP Fit to every opportunity in your pipeline is perhaps the single most important activity to help boost sales efficiency.
From helping marketing hone messaging and target their spends to helping sales qualify deals, multi-thread effectively, and avoid poison pills, to helping product build for the right customers, understanding your ICP and being able to communicate it to the entire team is truly invaluable.
Traditionally, a small group of people, generally in marketing, would create the ICP. They typically would take a few weeks every year or so to look through company data and create an ICP profile that lived in a PowerPoint somewhere on the cloud or buried deep in emails. This approach was typically time-intensive, inflexible, difficult to operationalize, and prone to human biases and errors.
But the ICP landscape is changing. Patri’s two newest products, Patri RevFit AI and the Patri ICP Engine API, are revolutionizing how ICPs are generated, quantified, communicated to the team, and operationalized.
Patri RevFit AI is a revenue intelligence platform that makes pipeline management intuitive, powerful, and proactive. Powered by machine learning, Patri RevFit AI automatically analyzes your opportunities and assesses their propensity to win, their relative fit for your company’s selling profile, their likely close date, and provides AI-generated insights about each opportunity.
The Patri ICP Engine API is dynamic AI-powered software that finds, refines, and monitors your ICP and enriches your CRM, BI, RevIntel, Sales and Marketing Automation, CS Technology, customer data, and more to enhance metrics and reports at the top level with one of the most business-critical data sets you can discover: the ICP. With Patri’s ICP Engine API, quickly discover your ICP(s) and the quantified ICP fit of every opportunity in your pipeline.
Patri RevFit AI and ICP Engine API are here to help companies boost their sales efficiency by accurately understanding, quantifying, and communicating their ICP across their teams.
Interested in discovering the ICP Fit of every opportunity in your pipeline?
And if you want to learn more about the Patri ICP Engine API and its capabilities: