A company’s industry, number of employees or location doesn’t reveal much about its needs and interests. This type of company information is often referred to as firmographics. It has significant value to salespeople who target companies in a specific industry or a chosen size-range as it allows them to quickly filter promising prospects out of a longer list of potential customers. However, firmographic data doesn’t reveal enough details about a company's organization and current situation to help you find those hidden gems you should go after right now.
If you’re a salesperson in forefront you combine firmographics, technographics (data showing a company’s online profile and technical tool-box, etc.) and insights from buying signals when sales prospecting.
Example: How likely would you say that it is that a service company in the New York-area with 200 employees is interested in translation services? You now know the company’s basic firmographic data. It’s difficult, if not impossible to tell, right?
If I give you a bit more information about this company, I might make it easier for you to provide me with a viable answer. The company recently launched an initiative in the Nordics, opening up its firsts offices in Denmark and Norway after closing a successful funding round (buying signals). The company has its website translated into four languages, English, Spanish, Norwegian and Danish, and it works actively with content marketing and is active on Twitter, LinkedIn and Facebook. (Insights from technographic data.)
What do you think? Is this company interested in translation services or not? I understand if you still wouldn’t bet your life on that it is. Though, now when you know a bit more about the company, you probably feel safe to agree with me when I say chances are good that that’s the case.
Company information based on both firmographics and technographics helps you as a salesperson to find those hidden gems who are most likely to appreciate a sales call from you today.
This article makes up the third chapter of our ebook The 60-Page Ultimate Guide to Sales Prospecting. We’ll go through what firmographic data is, when it’s useful during sales prospecting and when it simply doesn’t provide you as a salesperson with enough information to help you distinguish a rock-solid prospect from a mediocre one.
In the next chapter which we’ll publish on May 1st, we’ll cover everything on technographics data. Eager to check it out already today? You can access it now by downloading the complete ebook here.
What Is Firmographics?
The same way people can be described and segmented based on demographics, firms can be analyzed by using firmographics. Commonly used firmographics use industry, location, and company size.
For example, Salesforce.com firmographic data could look like this:
Industry: Enterprise Software, SaaS, Cloud
Location: California, United States
Company size: 10k+ employees, $8+ billion in revenue
In most countries, most of the firmographic data is public information. All companies need to register in the local business registries and select their industry and location of their headquarters. Publicly traded companies need to file their detailed financial numbers several times each year and in some countries also private companies need to share their key financial figures each year.
Sometimes, firmographics also refers to other variables such as performance (growth, credit rating), status and structure (legal status, a relation of one organisation to another), age, ownership and position (market share, industry position).
For salespeople, using a combination of industry, company size and location provides a simple way to narrow down their list of potential prospects.
There are several commonly used industry classification systems in the world. The Standard Industrial Classification (SIC) was established in the US in 1937 and is also used in some other parts of the world such as the U.K. Another well-known classification is NAICS (North American Industry Classification System), released in 1997. In Europe, a similar classification system is called the Statistical Classification of Economic Activities in the European Community, often referred to as NACE.
Sales Prospecting with Firmographics
For salespeople, using a combination of industry, company size and location provides a simple way to narrow down their list of potential prospects. Salespeople might prefer companies nearby because of easy access to face-to-face meetings. Their offering might not be relevant for small and medium sized businesses, which makes it critical to filter companies based on their revenue. Many sales organizations have also assigned certain industries for certain salespeople, and using industry-based segmenting allows people to quickly find their own target companies in these situations.
In today’s world, basic firmographics don’t often reflect clear differences in needs, benefits and product use. That's why salespeople are increasingly relying on other data points, such as technographic data and buying signals, when trying to make their prospecting approach more pointed and timely. This is also the reason why sales prospecting with static prospecting lists from list-providing vendors doesn’t cut it for high-performance salespeople. These lists are based almost exclusively on company's annual reports, consisting of firmographic data, and are only updated yearly.
In Chapter 8 of Vainu's ultimate guide to sales prospecting you can read more about the benefits of using a modern prospecting database that gives salespeople access to up-to-date open and public data.