Bridge Group is a B2B SaaS sales consultancy, and we chat with themquarterly about the sales environment. Wealso retain them to opine on sales teams and processes when we’re consideringan investment. Below is a very crippiece they shared with us on TAM and ICP refinement. It’s so good, we wanted to share it verbatim. Below is what Bridge shared.
“Identifying the total addressable market (TAM) and ideal customer profile (ICP) is essential to ensure that both time and monetary resources are being invested wisely. Without clear focus, there is a risk of inefficient spending and misallocation of bandwidth, which will hinder pipeline generation.
1.Effective Allocation of Resources. Knowing exactly where to focus will allow us to allocate budget and bandwidth more strategically, ensuring that efforts drive additional pipeline rather than relying heavily on marketing or the partner manager to create opportunities. Relying too much on these channels introduces risk into the sales process, and diversifying through outbound prospecting is essential.
2.Outbound Prospecting is Expensive. Outbound prospecting, while necessary, is costly and has a lower conversion rate compared to inbound efforts. This makes it crucial to refine the target list, ensuring we’re reaching out to the most promising prospects. A more refined target list allows for:
-Higher relevance in outreach, improving the efficiency of prospecting efforts.
-Less wasted effort and money on leads that are less likely to convert.
3. Segmentation Enhances Messaging Precision. By segmenting the target list (e.g., by industry, employeesize, nature of hiring needs), we can ensure the messaging is highly relevantto the specific needs of each segment. Thissegmentation allows us to:
-Build campaigns that resonate with different tiers of prospects.
-Avoid placing the entire burden of message customization on sales reps,who can focus on deeper personalization once the broader relevance is in place.
4.Better Customer Management Post-Sale. Refinedtargeting not only improves the prospecting phase but also informs how we managecustomers after the sale. For example:
-Tier 1 prospects (high-value, strategic accounts) become Tier 1customers, receiving higher levels of support, Customer Success Manager (CSM)attention, and resources.
-This structured approach allows us to prioritize our best customers whilemaintaining an efficient system for managing different levels of accounts.
5.Iterative Improvement Based on Insights. The initial phases of refinement don’t need to beperfect. However, creating a grading system that prioritizes different levelsof prospects will allow for continuous improvement. Over time, as we acquiremore customers and gather data on which segments have the highest propensity tobuy, we can further refine the target list and segmentation approach. This willmake prospecting and customer management even more effective.
In summary, refining the TAM and ICP allows us to optimize resources,improve outbound prospecting efficiency, craft more relevant messaging, andensure better post-sale customer management—all critical factors for drivingsustained growth.”
We can’t say enough about Bridge Group. They do strategic assessments, write playbooks, and can also domanagement training and coaching. Connect with Kyle Smith (ksmith@bridgegroupinc.com) if you need help building or re-building your sales processes.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author atsammy@blossomstreetventures.com.