Here’s a Secret: The Best Performing ITADs Turn Away Business
Sounds crazy, right? But they’ve figured out something most ITADs miss: Riches are in niches.
The Problem with “We Serve Everyone”
Walk me through your ideal customer.
“Any company with IT equipment?”
That’s not a strategy. That’s hope.
Here’s what happens when you sell to everyone:
• Your marketing is generic and forgettable
• Your sales reps become jacks of all trades, masters of none
• You lose deals to specialists who speak the customer’s language
• Your win rate stays in the 15 to 25 percent range
• You compete on price because you have no differentiation
Let’s do it better.
Part 2: Stop Selling to Everyone—How to Find Your $192M Market Opportunity
In Part 1 we covered the basics of sales team structure, including how to align roles while considering future growth. Now we turn to understanding your target markets and the details supporting the acquisition of net new customers, a foundational aspect of sales team success.
Target Market: What Is Your ICP Ideal Customer Profile?
ITADs have a complex sales environment with upstream and downstream components, including various channel sales opportunities. Your company’s profile for ideal new customers should be documented and updated regularly. While we will all chase any qualified business with vigor, our sales outreach works best if we play to our strengths. These new target customers should be mapped to a recent SWOT analysis.
The Foundation: SWOT Analysis But Actually Useful
You have likely done SWOT analyses before. Usually during strategic planning when someone fills out a template and then it goes in a drawer forever.
This time is different. We are using SWOT to make actual decisions about where to focus your sales efforts.
Step 1: Start with AI
Do not stare at a blank page. Use AI and ask for a SWOT analysis based on your revenue, location, and capabilities.
You will get something generic. It will be fine. But it will also be useless because it is true for every ITAD.
Step 2: Make It Specific to Your Business
Schedule a 90 minute meeting with your leadership team and make it brutally honest.
For each quadrant, ask:
Strengths
• What do we do better than 90 percent of competitors?
• What do customers specifically compliment us on?
• What would be hard for a competitor to replicate?
• Do we have domain expertise in any industry?
• Do we have unique certifications or capabilities?
Weaknesses
• What do we consistently lose deals over?
• What do customers complain about?
• Where are we winging it versus having a real process?
• What keeps the founder or CEO up at night?
• What would an honest employee say is broken?
Opportunities
• What customer segments are we not pursuing that we could win?
• What adjacent services do customers keep asking us about?
• What is changing in the market that plays to our strengths?
• Where are our current customers also buying similar services?
Threats
• Who is eating our lunch in specific segments?
• What trends could commoditize our core offerings?
• What would put us out of business in five years if we do not change?
Understanding Your Sales Channels: Direct vs Channel
For ITAD and tech sales companies, it helps to examine potential customer segments across both primary direct and channel opportunities.
From there, begin customer segmentation by grading current capabilities with progressively more detail. Many segments may initially fall into weaknesses or opportunities, which highlights where focused growth can occur.
The ICP Framework: Getting Granular
Now you are ready to build actual Ideal Customer Profiles. Go deeper than company size and industry.
ICP Dimension 1: Company Size Segmentation
Do not lump all direct enterprise accounts together. The buying process for a 200 person company is completely different from a 20,000 person company.
Here is the counterintuitive truth: Mid market accounts are often more profitable than Fortune 500 accounts, even though the deal size is smaller.
Why?
• Less competitive pressure equals better margins
• Faster sales cycles equals lower customer acquisition cost
• Less demanding equals lower service costs
• Longer retention equals higher lifetime value
ICP Dimension 2: Industry Vertical Segmentation
This is where the magic happens. When you specialize by vertical, you:
• Speak the customer’s language
• Understand their pain points
• Know their regulatory environment
• Reference relevant case studies
• Build a differentiated brand
The key question: Which verticals align with your strengths and opportunities?
You can continue drilling deeper into each segment to select new target markets that represent the best opportunities to generate new ICPs.
Collect input and data such as:
• Local business journals and publications to identify predominant industries in your area
• An honest assessment of the people, process, and tools required to compete effectively
• Required investments such as ESG reporting tools or enhanced compliance capabilities
• Existing staff with domain expertise that can support the vertical
Alongside strategic accounts, it is important to build ICPs for other key segments your company can realistically serve and dominate.
What’s Next: Part 3 Preview
You now understand how to begin a SWOT analysis and build your ICPs.
Coming in Part 3:
• Finalizing your ICPs
• Prioritizing top prospects
• Building your Strategic Account Development Plan
• Finding the $192M opportunity in your own backyard
Part 3: From ICP to Action—Building Your Strategic Account Development Plan
The Complete ICP Profile: Going Deeper
In Part 2 you identified your target vertical and created a basic ICP. Now we make it surgical.
Developing an ICP is critical to adding net new customers. Companies with a strong ICP sales process achieve significantly higher win rates because they better understand their prospects and requirements. With a solid ICP, you can build a focused go to market plan and realistic business generation budgets.
Using an example of an ITAD in Columbus, Ohio, a SWOT analysis identified opportunities in Manufacturing and Insurance. Previously, the company had no vertical focus. Now, those two segments became the growth priority.
New Business Generation Plan
Develop a summary plan to attack the new ICP. Convert weaknesses into opportunities and strengths. Identify required resources and budget assumptions. Gain leadership alignment.
Top Prospects List
Identify actual companies to target using public data. Rank them by headcount, revenue, or strategic value.
Creating the Plan with Strategic Accounts in Mind
Assign ownership of the strategic account development plan. Avoid relying solely on hiring one experienced salesperson. If the rest of the organization does not change to support the new direction, that hire will struggle.
Hot Take: Most ITADs underfund new vertical development by 50 to 75 percent. Then they wonder why it fails.
Detailed Planning Suggestions
Add at least one or two unique deliverables such as:
• ESG reporting
• Asset management integrations
• Other lifecycle services
Develop strategic selling capability:
• Strengthen sales leadership
• Hire an industry experienced BDE
• Invest in strategic sales training
• Plan clearly for both Marketing Qualified Leads and Sales Qualified Leads
Create an annual operating plan or proforma P and L that includes:
• Sales, marketing, and product development expenses
• Staff costs
• Year one revenue assumptions
• Customer acquisition costs typically 10 to 20 percent of annual revenue
• Profitability timelines of 24 to 36 months
With a solid plan to dominate your chosen segment, update your SWOT analysis accordingly.
An examination of leading ITADs in certain regions shows little vertical specialization in areas like Manufacturing, Healthcare, or Financial Services. This highlights the significant opportunity available to ITADs willing to focus and position themselves as industry leaders.
What’s Next: Part 4 Preview
You now have defined ICPs, improved your SWOT analysis, and begun your strategic account development planning.
Coming in Part 4:
Developing a powerful inside sales lead generation machine
• Inside sales versus inside lead generation versus outside lead generation
• Technology enablers
• Training and mentoring specific to ITAD and IT reseller environments
Questions or comments? Email pete@circmo.com
Circular Momentum helps ITADs develop and implement growth strategies that outpace the competition. Be sure to check out additional playbooks on Marketing and Lifecycle Services development for high technology businesses.