On this week’s episode of the Performance Delivered Podcast, we talk to Kirby Wadsworth, Chief Marketing Officer at Ionir. Kirby has more than two decades of marketing leadership in both large enterprises and smaller startups with experience in targeting, segmentation, and ICP.Today, we’re talking to him about effective ways to approach targeting.Kirby says, “It doesn’t matter how many leads you generate, it’s how many conversations you start with targeted accounts.”Listen in as we discuss:
- What happens when you are selling to the wrong customer?—(Hint: everything you don't want)
- When is the right time for a company to start targeting?
- How narrow your targets should be in B2B and how to use the right metrics to find the “magic”
- And much more
Mentioned in this episode:
Transcript
Voiceover: This is Performance Delivered. Insider secrets for digital marketing success with Steffen Horst and Dave Antil.Steffen Horst: Welcome to the Performance Delivered Insider Secrets for Digital Marketing Success Podcast, where we talk with marketing and agency executives and learn how they build successful businesses and their personal brand. I'm your host, Steffen Horst. The topic for today's episode is targeting, segmentation and ICP. Here to speak with me is Kirby Wadsworth who is the CMO at Ionir. A high performance software defined container native storage and data management platform that ensures data is as agile as applications in the kubernetes environment. He is a Forbes top 10 most influential CMO and among the top 50 marketing thought leaders. Kirby is also the author of the Amazon five star book Recommend This! Delivering Digital Experiences People Want to Share. Where he provides expert advice on social media, digital marketing, SEO, PPC and website development. I'm very excited to have him as our guest today. Kirby, welcome to the show. Kirby Wadsworth: Thanks, Steffen. Appreciate it. Great to be here. Steffen: Now, Kirby before we dive into today's topic, I'd love to find out more about yourself. Tell our listeners a little bit about yourself. How did you get started in your career with marketing, etc.Kirby: Sure, well, I actually grew up on the technical side of things. My all of my experiences in technical marketing, computer software, hardware, networking, security. But I, I originally was a customer, customer engineer, sales engineer, field engineer. So I was, you know, at the coal at the coalface with the customers dealing with the problems that were often created by miss set expectations, and maybe overly enthusiastic selling and positioning of products. Because I was the one who had to make the promises come true and often couldn't. So somewhere along the line, I I jumped the fence and got on the other side, to be deciding what the promises would be and what the what what we would be selling and how we would be selling it. But my background is, as I said, is is essentially technical. And then I then I got my MBA. I was I was lucky enough to have studied under some of the classics. I went to Kellogg and I spent time with Philip Kotler who, you know, kind of wrote the classic, you know, marketing management books and, and had studied underneath a lot of the folks who invented the idea of segmentation and ICP and the like. The funny thing about it, though, was to tell you the truth, I didn't do any of the things that I was taught, really, when I first started. I just sort of hacked away at this and even though I had been trained properly, I was ignoring myself, when it really came to the prominence of my thinking. And I began to really completely understand it was when I started to try to teach it myself. The first the first class that I taught in marketing management. I was at Babson College at the time, I had to present almost like maybe the second week, I had to present segmentation and how to position then, and honestly, I bumbled through it so badly that I embarrassed myself. I'm sure the kids that were in the class had no idea what I was talking about. I was putting up matrices and, you know, industry by size and all this other stuff. And it finally dawned on me that that that was not the way to go about this. So I kind of at that moment had the epiphany that this there had to be a better way, you know. So I guess that's what we're here to talk about is maybe some of the ways that I've come up with that are there more effective than the in the old school stuff.Steffen: Yeah, yeah. Well, I mean, you know, those books were written quite a few years ago, you know, yeah, a lot of things changed. Right. I mean, I would say the basis are probably still the same, but there are add ons and further developments to to that. Now. Obviously, as an agency owner, today's topic is close to my heart. I mean, targeting the right audiences, segmenting them and then developing the right ideal customer profile, can make or break a campaign. Kirby, how do you approach targeting in general, and what is the process?Kirby: Yeah. Well, I'll tell you, I, I think the simplest thing, the simplest way to understand this, maybe a walk through it. So let me give you an example from real life. One of my, I do consulting as well as I'm a full time professional CMO, but I also consult when I can. And one of my consult one of my consulting clients had this exact problem. They had been startup company relatively early, you know, wide net, right? Anything that looks good, let's let's go sell to it. And we'll figure it out later, it was kind of like, oh, shoot them all, let let the Lord figure it out later. But but they had reached a point where they had 150 or so customers. And they needed to develop some cohorts. They needed to understand what if there were relationships between these, these customers. So what we did, and I think it worked very well is we sat down as small group, internally. And we brainstormed all of the characteristics that we could think of that felt to us, like, they were important in defining who will cut who a target customer might be. And really, you know, we took a broad group across the company. We had some engineers, some product people, some marketing folks, some sales people, some sales managers. We brought the CEO in for part of the discussion, just to get everybody's different perspective and opinion. There's no science to it, it was just completely, you know, throw it at the wall. Then we took that list, which was something like 100 different characteristics, you know, one of which I remember, well, was the, how long if the target customer had been in the military? And how long they had been in the military and what rank they held? Steffen: Wow. Kirby: Well, it turned out, it was right, that one of the see's had identified that all of their very best customers had grown up in the military. You know, had spent long, long periods of time in the military. And, okay, well, that's, that's a really interesting characteristic, it may be a little hard to identify all of those details, externally, right? Not necessarily impossible, but but hard. Anyway, we had 100 or so of those, where they went to school, and just all kinds of, of interesting stuff that people wanted to throw on the table. Then we took a much smaller group, and really analyzed them and threw out about half, you know, and just said, look, either we can't find this, you know. It's a good qualifying question if we get somebody on the phone, but but we're not going to identify this externally, to be able to put together target lists, or you know ICPs. Or it just didn't make any sense. You know, it was some edge cases. So we got it down to a smaller number. Then we looked at the 100, plus companies that they had already sold to. And we flashed our set of characteristics, which was now down to let's call it around 30, or 40 against the target list, or the sorry, the the sold list that you know, the existing customers. And from there, we identified some characteristics that were difficult to do, we got some desk research assistance, offshore desk research assistance, which was very helpful. You know, there's plenty of companies you can go to you don't think of this, but there are plenty of companies you can go to and say, hey, look, I need you to go find out how long the in this case it was, I think a ciso. So this was in the security business. So as a chief information officer, chief chief information security officer. Find out if they've been in the military and find out what their rank was, and how long they were in the military. And you know, there are people who will go off and do that recent research for you for, you know, five or $10 a name and then they'll come back. You can't do it at scale, but it works perfectly for this part of the work. Steffen: Yeah. Kirby: Then from there. It's not me, by the way, if I'm going off to too much, but I just my thought from there, what we did is looked for the correlations. And gosh, there it was, it was a very clear correlation. And it was much simpler than we really thought it needed to be. It was based on yes, the size of the company. But we looked at number of employees, we looked at square footage that the company owned actually. Turned out to be an interesting characteristic. And we looked at some keywords that were associated with the company, we had our desk research folks look through their 10 Ks, and through their websites and stuff and look for a certain set of keywords to see if we can get some correlation. And we found some that were that were clear where let's just make it simple. You know that the CEO had said that this was going to be the year that they were going to apply digital transformation and they were going to move all their applications to mobile devices or something right. You know, it was something along those lines. So from all of that, all internal, you know, not a lot of external research. Other than this little bit of desk review, certainly no surveys or anything else, we just literally did most of this internally. But we came up with a list that we felt pretty comfortable was a dividing line. And we found that yes, about 60, or 70% of their customers fell into what we call Group A, which was the, you know, the more favored group, the one that people thought we should be going after. And, and that was interesting. And it had something to do, as I said, with size it had to do with the size of the orders. And then we said, wait a minute, let's take a look at other things associated with these groups and see if they really, these two, we just had two groups at that point, just let's look at them and see if they make sense. We found that the non target group, let's call in Group B, had more customer service calls, took longer to solve their customer service calls. Something like 70, or 80% of the major issues associated with customer satisfaction came from that smaller group. They had smaller deals less profitability, shorter lifetime, you know, they were harder the retention was was less. I mean, everything that you wouldn't want, fell and started to fall into this group. Okay, maybe this was a magical experience, or you know, but I don't think so I've repeated it about 20 or 30 times. So I'm pretty sure this, most people will find this if they go through the process. But then you find out that the target companies, the ones that you really, you know, it really makes sense where you where you kind of have earned the right to be successful, are harder, you know, they they're, they're harder to get into, they take longer, they're more effort. So what would happen without targeting and without, you know, at the effort here, is that the salesforce and the partners would sort of naturally follow the water where it, you know, downhill, right. And they would go after these smaller deals, the less targeted deals that look like, they might be easier, to close or quicker to close, even though, from a strategic perspective, they were probably the worst thing that the company could do would be to close, you know, to focus on those kinds of deals. So anyway, that's a holistic story. And it tells you, you know, part of the outcome, and part of the part of the process that that we went through. But all in all, really a relatively simple, internally oriented process that just required everybody to pull their heads up, you know, and spend a few hours or a few days, and some iterations going through the thinking process to really, to really identify this. And the outcomes for the company were just astounding. I mean, you know, when they really did put the discipline in and say, hey, look, we're going to give those small deals to partners, we're going to stop having our own sales, people call on them, we're not going to put a lot of effort and energy into it. We're going to have more of a community support model for those people than the target audiences. Profitability goes up, you know, the whole everything.Steffen: I think this is this is the interesting thing, where probably a lot of businesses, you know, have to decide, am I going to go after the entire market that technically, you know, could use our service our product, or am I going after a sub segment. Because, you know, sure, if you have a wider market, there is potentially initially a greater opportunity to make money. But then as you just outline, there are certain hidden challenges that you might not see immediately, unless you put the time in, that you just explains, breaking down the the individual groups and identifying what each of the group has its pros and cons, right. And then, by basically fine tuning and targeting a specific group, or two or three specific group, you basically know exactly what you're getting yourself into.Kirby: And it's data, right? It's not opinion, it's data. Now, it starts out by the way, in, which is important to understand, and I did explain this, but it starts out as 100% pure opinion, get everybody's opinion. And let's put it all in the stew and boil it off. But when you start to click, the data starts to become clear, and you start to collect it. Now, the emotion comes out of this. People's opinions become less interesting and experience becomes less interesting too. Because a person comes out, I've been doing this for 30 years, I know what I'm doing. We need to go after, you know, railroads or whatever that all gets goes away. Now, I'll tell you though, it can be a controversial process because product people, product managers, typically, hate to carve off a partial court part of the market and say we're not going to serve that part of the market. We're only going to focus on on the other part of the market. You get a lot of but but but but but wait wait wait. Get a lot of that. Yeah, we could we can we have the capability, we know what, wait a minute, we should. But when you look at the data, and we just with a cold, clear eye and say to yourself, it just doesn't make sense to get more of that type of customer is as easy as they might be or whatever. It's very freeing, I think from a marketing strategic and even the CEOs perspective. Steffen: Yeah.Kirby: I don't want I do want to just make one other point. Not sure if I can. I was with a CEO yesterday actually talking about a similar subject. And he said to me, he didn't think he was ready for this. It's too early the market. You know, we don't know enough about the market yet. We don't want to, we don't want to turn anything away. That's true, early on. That that's true. In the earliest stages of startups, the company that I'm with now, for instance, is almost a very early startup. Until you have the mass of customers, you know, 100 ish kind of customers, you're not going to see the cohorts evolve, right? So you can't be picky in the beginning. Unless you're absolutely sure that you've got perfect product market fit out the gate, which I don't know, very many people have been that lucky. Right? So you kind of have to keep the, the filter wide in the beginning, until you've got enough heft in your, in your, in your customer base, to be able to identify these things, but it's very important. And, you know, obviously much more important for larger companies that have, you know, hundreds or 1000s of customers to be able to do this as well.Steffen: Yeah, that's a that's a that's a great point.Kirby: But not everybody needs to do it all the time. You know, I wouldn't tell you know, my CEO, friend from yesterday, I nodded my head and agree with him, you know, he was I said, look, let's let's talk when you have 50 or 60 or 70. You know, and then maybe we can start to see some patterns that that that emerge that start to make sense.Steffen: Yeah. So I mean, what you just said almost answers my next question, which was, you know, when to start targeting. So basically, what you are saying is you you need a number of, of clients, before you can even dive into into the targeting part, otherwise, you won't have enough data point to kind of get in, right.Kirby: Yeah, so you've heard the expression, fake it till you make it, you know. And you do have to fake it till you make it in the beginning with, with startups. I've done 10 of them now. And you have to that's what, that's where you rely on the visionary, the entrepreneur, you know, the founder, the CTO, the person who woke up in the middle of night and had this idea for, for a solution that they could sell. And you got to get a go with that, you know. So, you are targeting, I mean, you know, because the company was built to do something for somebody, but you can't be too specific about it in the very beginning. And what I like to say is, you need to have big ears, especially in the beginning, you know, you need to really listen, when, when the customer says to you, that's interesting, but. Or, I get it, but my problem is somewhere else, you know, it looks like maybe you could do this, if you could twist it and paint it blue. And you know, maybe it would solve this other problem for me. Those, those are key and important things. And what happens sometimes is that the founder is the CTO, the visionary, the entrepreneur, the original thinking, shuts those down. But no, that, no, no, that's not what I'm gonna do. I'm here to build, you know, a god box, that's gonna solve everything for everybody. And I need to find somebody who needs everything solved, right? And that's all I want to find. And they're sometimes offended. Oh, are you kidding me, you want to use my brilliant idea that goes solve that silly little problem over there that anybody could do that. But the point is, anybody isn't doing that. And if you could take that amazing, you know, box that you've created, and apply it to solving somebody's problem that's willing to pay you don't be proud. You know, it, take it right run with it, we'll sort it out that that is a situation where you say, well, well, we'll go solve that problem. And if we don't have to modify the product too much. Let's go get it and then we'll we'll get if we get 10 of them that look kind of look alike. We have we know we might have a little segment there that we can expand upon.Steffen: Now, Kirby, earlier when you gave the example on how to approach targeting, you talked about some really specific targeting characteristics like when you when you talked about all the military, you having a specific rank, and they have been there for a certain period of time. So that's that's very specific characteristics. Are there characteristics that are more general that companies should use when working on defining their targets?Kirby: Yeah. So that and I think that's the critical thing, at least in the process that I use, and that I've seen that works well. You collect all of them, you know, create a spreadsheet, put a column for every one of them. And, you know, assume that you'll figure out how to get the information or how you how you'll define each one of those columns. But when it really comes down to is you're going to ignore most of them. And you're going to go with the ones that I described as externally observable. And that's important, because what you want to be able to do without spending a fortune on every to qualify every target, before you start marketing to them, is have an externally observable set of care are a set of externally observable characteristics. The obvious ones that everybody wants to fall to are usually too simple, right? Industry, size, geographic location, headquarters. Those are important, sure, you're going to include them because they're gross characteristics. You know, they're they're not, they're not specific. They're gross. But they're important, they can be important. You don't want to ignore them. But the fine line, the place where you find the magic is, is typically one stage down from there. It's not down in the minutiae of they were in intelligence services, and they were there for 10 years. It's somewhere below. Well, they're in the travel industry, and they're a $2 billion company headquartered headquartered in in the United States, right? It's below that. And that's where you're looking for the magic. Now, I can't give you specific examples of what those characteristics are, because they're different for every company, that's, that's struggling with this, right. Every marketer has to go and determine them, what those are for themselves. But the process that I described for you, getting the smart people in the company who actually know what they're, you know, have interacted with customers, understand the product, get the vision and all that, in a room, the likelihood is fairly high, that those secondary characteristics, the real defining ones that really separate the herd are going to be in your list. Now, it's just a matter of figuring out where they are. And again, I come back to this, this term, externally observable, if it's not easily and readily externally observable, you really have to throw it out. Push it aside, because you're chasing something that's going to either cost you a fortune to figure out, or it's such a piece of minutiae, that it's probably irrelevant. And by the time you figure out, it's irrelevant, you've spent a lot of money to source that data. So what can we observe externally? Well, of course, at least as we said, all the big stuff, but the secondary characteristics, I have a company that I work with a wonderful company, I'm sure they won't mind by using their name called VergeSense. They're in the property tech business, and they're wonderful. Rebecca Corliss is the CMO. And she is absolutely astounding. What they found is they were trying to sort of divvy up the mark, the marketplace is they could externally observe whether or not there was a work place office, or something along those lines. Whether whether the company had invested in something beyond HR and real estate. Was there a department that was worried about work, workplace of the future, about safe workplaces about return to work? Those kinds of things? Well, it turns out, yes. And guess what, they have titles, and you can find them on LinkedIn. And so you can look at companies and you can say, do they have people with those titles? It's not that you're necessarily targeting the title. But the fact that they've invested in that department means that they have characteristics as a company that really cares about in this particular case, that the, the the quality of the use of the real estate, how many people are in meeting rooms, and you know, how many people are allowed to be in the building and, and that sort of thing. Which was important to VergeSense. But again, you wouldn't normally think to go say, well, let's find out if they have a workplace director, the director of modern workplace or something like that. But they were lucky enough to be able to find that and it was easily externally observable. Once they realized that that was an important characteristic, they added it to their list and companies that didn't have that dropped quickly to that B that that list of B companies that they didn't want to target. And sure enough, the ones that did have it were investing and they were the ones they turned out to be the better customers.Steffen: Yeah, yeah. Now Kirby, when it comes to teams within an organization, there obviously are different opinions on how narrow a target should be right? Here, when we talk to b2b companies, we're always trying to get a clear target so that when we run digital marketing campaigns, we can send for leads that actually have a higher propensity to convert. Now, from a general marketing perspective, marketing might say, hey, you know what, no, I want to keep a little bit wider, because that gives me a chance to drive leads. But sales might say, well, you know, if you just drive leads, and they're not very targeted, that means that our salespeople will have to spin more wheels because they have to follow up, and the conversion rate basically, will go down. So we'll do more, but it doesn't really lift the needle much. How do you how do you get sales and marketing aligned on targets?Kirby: Right, right. So this, this is an ugly problem. Right? When the goals aren't allied, right? If marketing is held accountable for the number of leads, that they generate, but not held accountable for the number of opportunities that are generated out of their leads the conversion rates, then we probably have a problem, you know. So part of it has to do with making sure that we're aligning goals. And that's obvious, I'll leave that to to an aside. You really, you know, you really have to be adamant about making sure that the goals are aligned, to probably a different goal, different topic. But I'll use an example. So when you put together your ICP, and you, just to be clear, that means ideal customer profile, for folks who might not know the acronym world here. So once you have your ideal customer profile, which means that you have a list of characteristics that you believe matter, and you're going to weigh the account against those characteristics, or you're going to weigh all the accounts against those characteristics, then the process becomes fairly straightforward. What you need to do is create a list of accounts that map to your ICP that have high scores, if you will, on the on your ICP, on your profile, that you can get to you know that that makes sense, right? And you stick to those. So this, this is a place where the leader of sales and the leader of marketing need to go into a steel cage, and they need to stay there until they're done, deciding what the target account list is going to be. And this isn't like we're going to go after 10. Pick 500 doesn't really make, pick 1000, it doesn't really make a difference. But the marketing leader needs to be able to say, okay, these 1000 accounts, fit our type A profile, or come close to you know, they're the closest store type A profile. And so, the salesperson then says okay, well, we're going to focus all of our energy on assigning target accounts. Following up, I'm going to have my cold calling, if I have cold calling, you know, go after these. I'm going to give 10 of them to each one of my sales reps and say, hey, you, it's your responsibility to go get into these accounts where whatever they whatever the sales leader needs to do, but they're focused on those top 500 or 1000, that you've defined as your tier A target. Marketing, on the other hand, needs to focus its energy on starting conversations in those top tier accounts, then you've got to report from a marketing perspective, your success against that metric. It doesn't really matter how many leads you generate. It's how many conversations can you start in target accounts? Because leads are just expensive paths that we can go down? There there, there are people that we can spend a lot of money trying to go you know, engage. Much better to say, between marketing and sales. Hey, look, I started 100 conversations, and they will and out of the 100 conversations that I started, 85% of them or 85 of the 100 were in our target our tear A target. Then you have automatic sales and marketing alignment, right? In your, you're building your campaigns to go after that 1000. It requires discipline. And it requires focus. And it requires the ability to say no to the what I call the great unwashed. If they come in and somebody comes in from the great unwashed non target account and says, no, listen, I want you to pay attention to me dammit, I have a problem. And you I know you can solve it. And it's it's really important to me. Okay, that's good, right? That's fine. This isn't the perfect ideal physics experiment. You know. It's a little sloppy, and we're going to allow for some sloppiness. But everybody has in my mind has to be focused on targeting the tier A group. And what do we need to do to start conversations? And by the way, how do we get to better understand and know and build relationships with the right people in those accounts?Steffen: That makes sense. Well, Kirby, I have, I have a few more questions. But unfortunately, we've we've, we've come to the end of. We need to schedule another another time to kind of finish off the other questions I have here. But, you know, thank you so much for joining me on the Performance Delivered podcast and sharing your knowledge on targeting, segmentation and ICPs. If people want to find out more about you and your company, how can they get in touch?Kirby: Sure, well, me personally, I'm pretty, pretty easy to find. On my Twitter, it's aceage, a c e s a g e, on Twitter, on LinkedIn, I'm just Kirby Wadsworth, happy to build build networks, connect with people do whatever. I do have a website. Not particularly. I wouldn't call it the most amazing and interesting website. It's kind of like the shoemakers children situation. But there is Kirbywadsworth.com if you want to, if you wanted to go there, at least that has my contact information, and a little bit more about what I do. Steffen: Perfect. Perfect. Thanks, everyone for listening. If you'd like to perform a silver podcast, please subscribe to us and leave us a review on iTunes or your favorite podcast application. If you want to find out more about Symphonic Digital, you can visit us at symphonicdigital.com or follow us on Twitter at Symphonic HQ. Thanks again and see you next time.Voiceover: Performance Delivered is sponsored by Symphonic Digital. Discover audience focused and data driven digital marketing solutions for small and medium businesses at symphonicdigital.com
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