Understand Your Customers' Profit Centers

The first step in defining the characteristics of your target market is to model how your product/service impacts various profit centers. It is important to remember that a profit center is treated like its own company within the company, so we have to look carefully to define the parameters of multiple profit centers. We also need to remember that a profit center is separate and distinct from a buying center.

For example, let’s assume you are selling a product/service that fits into a corporate contact center environment and your offer makes it easier for contact center agents to cross-sell products once they are communicating with a customer.

One of your targets is likely to be the retail financial services sector because companies in that sector tend to operate large contact centers and rely on them for sales. While the department ultimately approving your purchase order is very likely to be IT, the contact center environment has the capacity to affect sales of credit cards, home mortgages, insurance products, etc. IT is not a profit center, but the managers responsible for each of those products being sold in the contact center is leading a profit center for the parent company.

So, in the process of defining the characteristics of your target market and most receptive customers, we would look closely at how each of those departments is measured (ex. Does a credit card department measure profits based on number of new accounts, or projected interest income from those new accounts?) Once that data is compiled and understood, we can begin to position your offer in the language of the profit center department heads.

To paraphrase the idea:

Your message prior to this exercise was directed at IT managers and was built on information about your product (software capabilities to measure hold times, ability to interact with customers via multiple media types, etc.)

Your message after this exercise is directed at individual profit center leaders and is built around the metrics they use to evaluate their businesses (new accounts per day, average APR per account, etc.)

To make it even better, a good marketing strategist will do this data aggregation and profiling in advance so that your sales force starts by targeting customers whose profit centers are most impacted by your offer and communicating in the customer’s native language rather than in the language of the underlying technology.