Over the course of the past decade, sales intelligence tools have decried the more traditional methods of generating leads. Firmographic data is an integral component of modern sales intelligence as we know it today and can help your business flourish by sieving out flimsy and low-intent sales leads that eat up your resources.
Sales intelligence and firmographic data can help you decipher whether a lead is worthy enough for you to pursue, and is a key indicator that will help you close more sales and improve deal conversion rates. But first, what does “firmographic data” really mean?
What Are Firmographics?
Firmographics can be defined as the shared characteristics and attributes ascribed to firms and organizations to help segment them into different buckets or groups. Firmographics are to companies what demographics are to people; much like how you would segment 18- to 29-year-olds from a certain population into one group, firmographic data allows you to divide companies that have, for example, over 2000 employees and and put them together into one common group while moving companies that have 1 to 1999 employees in another.
Good sales intelligence products will always factor in firmographics, among other segmentation tools, to chart out actionable market segments based on how good a fit they are to a particular firm’s sales efforts. Based on your business’ product or service specifications and sales efforts, firmographic data will help you arrive at a precise list of high intent prospects with the help of information that will determine the buying intent of a prospect.
In this manner, you save a ton of time, effort, and resources that might otherwise be wasted chasing baseless leads, and helps your team shift its attention towards evidence-based, data-driven leads.
How Do I Use Firmographic Data to Gather Sales Intelligence?
Determining what firmographic variables to take into consideration when gathering sales intelligence is the first and most important step in this process. There are a lot of variables that you may want to take into account before arriving at insights that will help you make decisions for your company or team.
A simple yet efficient method of aggregating firmographic data is by taking variables that heavily influence the way a business firm operates into consideration. Using this exact approach, one study found that the firmographic information of over 11 million U.S companies, when paired with its public records, served as an extremely accurate measure in predicting whether a company would go bankrupt in a year’s time. From predicting bankruptcies to predicting your next customer, firmographics can be a powerful tool if applied correctly.
Appropriating the five variables for each prospective firm before weighing them based on their level of importance will serve as effective indicators to base your sales intelligence off.
The industry within which a prospective firm operates can serve as a key indicator to determine whether your product or service may be of interest to them. Your company’s sales offering may seem lucrative to firms in certain industries while prospects in other industries may have no use for it.
Let’s say you’re a business that manufacturers medical equipment. As a medical equipment manufacturer, you would ideally want to target the healthcare and pharmaceutical industry. However, if you were a business that sells a SaaS product, there might be several other industries in which your product can be of great impact.
The location of an organization can play a major role in determining the purchase intent of a prospect, especially in the service industry. In these kinds of cases, the proximity between a business and a prospective client may serve as a key point for a client to consider before a conversion can take place. Businesses that deal in tangible goods and services might have it more rough than those that sell contactless services such as software or cloud storage.
The segmentation of firms based on their location depends on the geographic area within which a business is situated. This may start from just filtering prospects down by country and percolate towards state, city, or district. Apart from distance, changes in location may give rise to cultural, climatic, and other differences such as population density that might affect your business. Location based firmographic data can therefore help you gather crucial data to guide your sales efforts and help you create the most suitable sales pitch.
For instance, you could be a medical equipment manufacturer based out of California and you find that there are a large number of hospitals in New York that require your equipment to function during the COVID-19 pandemic. Hospitals and other medical institutions in New York might find that it is easier, faster, and cheaper to purchase, transport, install and service the same equipment manufactured by one of your competitors in Minnesota, with the distance cut by over 1500 miles. If other sales intelligence variables fail to overcome the encumbrance posed by the issue of a lack of proximity to a prospect, they may not be considered viable.
“Size”, in the context of firmographic data, usually refers to revenue, number of employees, or number of customers. Depending on your company and your prospective customers’ persona, you may find that using a certain basis to estimate the size data of a firm may better suit you.
If you go by revenue to determine the size of a firm, you may find that firms that have earned a sizable revenue may be more willing to spend on your product or service than those with smaller revenues. If you use revenues to calculate firm size then you may want to juxtapose other variables such as the firm’s expenditure, number of employees or product pricing to get a glimpse of the larger picture.
Going by the number of employees to determine firm size can have you establish that there’s a bigger scope for your product at a firm with more employees. However combining multiple variables to derive deeper insights will make your findings more precise by filtering abnormalities and inconsistencies.
4. Status and Structure
The status and structure of a firm may vary based upon how you choose to go about determining it. On one hand you can define it based on the relationship between two firms, for instance, a subsidiary or a franchise. Likewise, you can also define it based on the legal status of a firm, for example a private corporation or a limited liability company.
If you view it as the relationship between one firm and another, for instance a subsidiary and its parent company. Based on your analysis, you may find that it is better to target the parent company first and then allow your product to trickle down to its subsidiary (or vice versa). The same may hold true for a franchisor-franchisee relationship. If you choose to segment a firm based on the type of company, you may get key information about how a company functions. Using this information you can create comprehensive actionable market segments.
The performance of a company can tell you a lot about its decision making, a key factor to consider when gathering sales intelligence. The performance of a firm can also be calculated using a multitude of methods. A few indicators that the performance of a firm can be gauged using include profit and loss statements, revenue fluctuations, customer satisfaction, financial statements, balance sheets, return on equity and financial ratios to name a few.
Different indicators used to evaluate the performance of a firm may each signify something specific based on your product or service’s offerings. These performance indicators can give you great insight into the process of creating actionable market segments that can drive your business’s sales.
Improving The Accuracy of Your Firmographic Data
Once you have aggregated the five major firmographic variables into actionable market segments, you have successfully condensed millions of prospective businesses into a few thousand ones. A feat that can possibly see your sales conversions go through the roof.
However, there are so many other pieces of firmographic data that you can take into account, like funding received, hiring status, or even the keywords they are currently using to market their product.
Beyond that, filtering sales intelligence further using tools such as psychographics, technographics and other important factors that influence decision making can greatly improve precision, providing you with a meticulous list of actionable market segments to fuel your business’s decision making.
Manually gathering a multitude of sales intelligence variables using scraping tools, focus groups, customer interviews, surveys and other such laborious methods may prove to be a resource intensive process that can further lack the necessary accuracy required by your business. There’s always the option to use an automated platform like Slintel to do the heavy lifting for you instead.