Pros And Cons Of Sales Prospecting Using Insights From Firmographics
Think of any company in the world. What type of company is Tesla? And Apple? What about Spotify?
Most likely, you can use basic firmographics to describe those companies. You know their industry, their location, and probably, have a rough idea of their number of employees and revenue. That's good enough... or is it?
In today's world, basic firmographic data doesn’t often reflect clear differences in needs or current situation. This is the reason why modern salespeople are increasingly relying on other data points when defining their ideal customer profile and focusing on sales prospecting.
Firmographics, a type of company information, has significant value to salespeople who target companies in a specific industry or a chosen size-range as it allows them to quickly filter promising prospects out of a longer list of potential customers. However, firmographic data doesn’t reveal enough details about a company's organization and current situation to help you find those hidden gems you should go after right now.
In this article, we’ll go through what firmographic data is, when it’s useful during sales prospecting and when it simply doesn’t provide you as a salesperson with enough information to help you distinguish a rock-solid prospect from a mediocre one.
What is firmographic data?
Simply put, firmographics, or firmographic data, is to organizations what demographics is to people. Common firmographic data includes industry, size, employee count, and location.
Compared to technologies, firmographic data is more static and isn't changed often.
For example, firmographic data on Salesforce looks like this:
Industry: Enterprise Software, SaaS
Location: California, United States
Company size: 10k+ employees, $8+ billion in revenue
In most countries, most of the firmographic data is public information. All companies need to register in the local business registries and select their industry and location of their headquarters. Publicly traded companies need to file their detailed financial numbers several times each year and in some countries also private companies need to share their key financial figures each year.
Sometimes, firmographics also refers to other variables such as performance (growth, credit rating), status and structure (legal status, a relation of one organisation to another), age, ownership and position (market share, industry position).
Where to find lists of companies and firmographics?
Fortunately, these days there's no shortage of data. A simple search on Google will provide you with basic firmographic information. But as we've seen, this might be not enough. Good news (again) is that there are plenty of free databases and online resources where you can find lists of companies in Europe to sell.
- Company websites
- News sites
- Social media sites
- Official registers
Why you shouldn’t base your ideal customer profile solely on firmographic data
For salespeople, using a combination of industry, company size and location provides a simple way to narrow down their list of potential prospects. However, many the basic data that a company’s firmographic consists of is just too… basic. Let’s take a company’s size as an example here. Not all companies with $10 million in revenue are in the same phase. A company in hyper-growth mode will be investing huge amounts into something important to them, while another company of the same size might be in cost-cutting mode and have complete different priorities.
Not all companies with $10 million in revenue are in the same phase. A company in hyper-growth mode has other priorities than a company in cost-cutting mode.
So … goodbye firmographics? What are you to do now?
No, I don’t mean that you should stop focusing on firmographic data altogether. What I’m saying is that you shouldn’t focus ONLY on firmographic data when creating your ideal customer profile.
Example: How likely would you say that it is that a service company in the New York-area with 200 employees is interested in translation services? You now know the company’s basic firmographic data. It’s difficult, if not impossible to tell, right?
If I give you a bit more information about this company, I might make it easier for you to provide me with a viable answer. The company recently launched an initiative in the Nordics, opening up its firsts offices in Denmark and Norway after closing a successful funding round (buying signals). The company has its website translated into four languages, English, Spanish, Norwegian and Danish, and it works actively with content marketing and is active on Twitter, LinkedIn and Facebook. (insights from technographic data.)
What do you think? Is this company interested in translation services or not? I understand if you still wouldn’t bet your life on that it is. Though, now when you know a bit more about the company, you probably feel safe to agree with me when I say chances are good that that’s the case.
5 strategies to supercharge your sales prospecting using firmographics and other insights
Here are five strategies we recommend to get your conversion rates up without spending any more time sales prospecting.
1. Instead of industry, think keywords
There are several commonly used industry classification systems in the world. The Standard Industrial Classification (SIC) was established in the US in 1937 and is also used in some other parts of the world such as the U.K. Another well-known classification is NAICS (North American Industry Classification System), released in 1997. In Europe, a similar classification system is called the Statistical Classification of Economic Activities in the European Community, often referred to as NACE.
Neither is a company’s industry code a very solid indicator of its needs or actual business. Sometimes they’re too broad, sometimes too specific, and it’s always dependent on how the company has labeled themselves.
What to do instead? Look for keywords mentioned on the company’s website.
Whether you’re looking for companies that run online demos, companies that install commercial LED lighting, or every company that is HIPAA compliant, simple keyword searches into the websites of the companies will provide you with exactly what you’re looking for.
Don't fret! You don't have to make your life's mission to read every company website out there. Technology, like Vainu Customer Industry, will do it for you and create detailed industry categories, so you can perfect your B2B segmentation.
By extracting data from the web, we can characterize companies, similar to how you might a human being.
2. Instead of size, think characteristics
While salespeople may be interested in the size of a prospective customer, that isn’t a great indication of the actual spend on different business areas. A company in hyper-growth mode will be investing millions into something important to them, while another company of the same size might be in cost-cutting mode.
By extracting data from the web, we can characterize companies, similar to how you might a human being. Some companies are forward-thinking, use modern technologies, invest in marketing, and have a large product team, while others are more resistant to change, attend a lot of trade shows and don’t post much on social media.
Whatever your ideal customer profile, there is a characterization out there that correlates with an interest in your services, and there is an indication on the web that can be traced back to those ideal companies.
3. Use technographics to further indicate spend
Even if you’re not in software and looking for companies using your competition, the tools or technologies a company is using, otherwise known as technographics, are a great indication of the needs your prospect may have.
Staffing customer support personnel? Look for the companies with a chat tool on their website. In logistics? Look for the companies with ecommerce platforms. Translation services? Look for websites with multiple languages.
The tools and technologies a company is using are great indicators of the need your prospect may have.
Once you know who it is you’re looking for, it’s a short step to figure out what technologies those companies use and filter accordingly.
4. Look at open positions or larger transformations to be on top of arising needs
Guess when we changed all our accounting software and service providers? Three months after hiring our CFO. And when do we spend on sales tools? When scaling up the team and expanding to new markets.
It’s simple: If a company’s hiring into a certain area, it’s a point of emphasis for them right now. If a company receives a round of funding or goes through a merger, vendors are re-evaluated and money is allocated to meet new ambitious goals.
Going through all the job boards, news outlets and press releases takes time, so use an intelligent aggregator to go through all the job boards for you with the relevant keywords you’re looking for. You’ll not only find an answer to who to target, but receive the appropriate talking points for a smarter discussion as well.
5. Build a more advanced ideal customer profile
Combine firmographic data and other data-points such as data from sales trigger events, technographics, and insights from company websites. After all, you might prefer to work with companies that are geographically close to you or companies in a certain size range.
Back to our example, you can describe Salesforce like this:
A traditional ideal customer profile can look something like this:
Industry: Software development
Location: New York
Size: 70-150 employees
Revenue: $70 - $110 million USD / year
A modern more advanced ideal customer profile can look something like this:
Characteristics: High digitalization
Sales trigger: invest heavily in new technology, has recently hired a new CTO or implemented a new technical tool
Characteristics: run online demos
Location: New York
Company information based on both firmographics and technographics helps you as a salesperson to find those hidden gems who are most likely to appreciate a sales call from you today.
Some final words of encouragement
Look, I get it: You’re used to sales prospecting the traditional way, and with your boss breathing down your neck about your activity numbers, you just want to call through that list of companies and not think twice about it.
It doesn't have to be like that.
The fact of the matter is that those numbers you’re doing will only get you so far. In today’s world, you need to cut through the noise, and the best way to do that is provide personalized value to the person on the other end.
Quality sales prospecting made with the support of a detailed ideal customer profile leads to more meaningful discussions with prospects because part of the discovery and needs analysis has already been done automatically before the first initial engagement with the customer.
In other words, combining different types of company information and not using just firmographics is one of the most important things to do to maximize the relevance of your marketing and the results of your sales efforts.