How to Make Sure You're Reaching Your Target Customers

For some tech companies, landing the wrong customer is expensive in the long run. Here’s how Shipfusion identifies a fit.

Written by Brian Nordli
Published on Jul. 02, 2020
How to Make Sure You're Reaching Your Target Customers

If you ask Shipfusion COO Jared Cantor to describe the e-commerce fulfillment company’s ideal customer, he’ll tell you what every fulfillment center sales leader would say — anyone that sells small, lightweight products with a low SKU count at high volume.

That is to say: Products that are largely interchangeable, easy to handle, easy to ship and don’t take up too much warehouse space.

But it’s one thing to define the ideal customer, and quite another to find companies like that and sign them up at scale. Perfect customers don’t exactly announce themselves. Sometimes they are obvious, like a jewelry or cosmetics brand with a loyal customer base. Other times, it requires reading between the lines, figuring out whether a popular dietary blog will be able to translate that success into selling nutrition bars.

Learning how to identify and cater to a primary customer is critical to any company’s success — after all, Amazon is known as the world’s most consumer-centric company for a reason. But it’s even more important for a smaller company like Shipfusion.

“In traditional sales, it’s like, let’s just ‘sell, sell, sell.’ It’s not like that in fulfillment. A lot of times, our salespeople are having to say, ‘Hey, you’re not the right fit for us.’”

Based in Toronto, the company provides end-to-end fulfillment services for e-commerce companies. It operates warehouses, packs the product and provides proprietary logistics software used by the customer to track progress. Without Amazon-scale resources at its disposal, it only takes a couple bad fits to end up with a warehouse packed with products that don’t move, Cantor said.

“In traditional sales, it’s like, let’s just ‘sell, sell, sell.’ It’s not like that in fulfillment,” Cantor said. “A lot of times, our salespeople are having to say, ‘Hey, you’re not the right fit for us.’”

Shipfusion’s methodical approach to adding customers has enabled the company to open three warehouses in Chicago, along with one in LA and one in Toronto. Even as online shipping booms, Shipfusion’s continued success hinges on adding the right customers and passing on the wrong ones.

Building a Customer-Centric Sales Approach

  • Identify who your company can provide the most value to, and make them your target customer.
  • Take a consultative approach to sales calls to make sure the customer needs are aligned with what you offer. Those conversations will set expectations and prevent a bad customer experience.
  • If a customer isn’t a fit, help them find a service that is better suited to their needs. Doing so ensures that every sales call is valuable to the rep and the customer.
  • Understand your customer’s industry so you can identify opportunities for growth. Cantor encourages his sales team to always research industry trends.
  • Scale the product services around the target customer’s needs.
Shipfusion Identify Target Customer Stock
Image: Shipfusion

Identify the Target Customer

In the early days, Shipfusion had no ideal customer profile.

The company started as a textbook rental company, but founders Brandon Luft and Michael Stock soon realized the software they created could be useful in e-commerce. Outside of Amazon, the fulfillment industry was still in its infancy and the founders were just hoping to find some interested customers.

Cantor joined in 2014 as the company’s VP of business development to help with those efforts.

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“It didn’t matter what you were selling or pushing, we were just trying to experiment and figure out the best way to do fulfillment,” Cantor said.

After running demos and reaching out to numerous e-commerce companies, Cantor eventually found success with companies in cosmetics, jewelry and pet products. While the products varied, they each had a similar profile — about 20 small product SKUs and about 30-100 orders a month.

“It didn’t matter what you were selling or pushing, we were just trying to experiment and figure out the best way to do fulfillment.”

With each new customer, the firm added warehouse staff and new features to the software to cater to each customer’s needs.

But it was a deal with a large jewelry company looking to transition into e-commerce that really solidified Shipfusion’s target customer, Cantor said. The company had over 3,000 product SKUs and completed thousands of orders each month, requiring Shipfusion to scale its warehouse staff and its software capabilities.

“That helped us shape the way we wanted to push forward with our customers because we knew what we liked, and we had experience in a variety of business sizes,” Cantor said.

The successful partnerships at various scales confirmed Shipfusion’s move to specialize in small, lightweight products. 

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Build a Customer Base Through Research and Consultation

Some of Shipfusion’s early customers showcase the breadth of industries small, lightweight products could encompass. Pet products, jewelry, nutritional supplements, cosmetics — a perfect partner could come from any one of those industries, or from a completely new one.

But each company has unique shipping and storage needs. A company that sells chocolate-coated nutritional bars might need a temperature-controlled environment to make sure its products don’t arrive melted.

“We never tell people we can’t help them. We always want to give them a path forward.”

Shipfusion will speak to any customer that reaches out for its services, but it’s careful to only partner with those whose needs it can meet. It’s a sales approach that relies on a mix of product forecasting and consultation.

“It’s not always so clear that a company is or isn’t a fit,” Cantor said. “You always have to do a deep dive into what has happened, where the company has been, where it’s going and the industry they’re operating in.”

When a customer reaches out to Shipfusion, the sales team first needs to make sure the warehouse can be set up to handle their product. A sales representative will ask about product size, weight and packaging needs. They’ll also explain what their warehouse is set up to manage and ask about the company’s broader needs, Cantor said.

If it’s a clothing company, which has large quantities of the same product in different sizes and requires racks and folders, Shipfusion may not be a good fit. In those cases, the salesperson will refer the customer to a fulfillment center that is better-equipped to meet its needs.

“We never tell people we can’t help them. We always want to give them a path forward,” Cantor said. “We know how tricky it is to find the right partner. If we’re not the right partner, we’ll always refer people to fulfillment centers better suited to their needs.”

But if it’s a fit, the team will ask for sales data and start researching the company’s website and social media presence. This is where forecasting comes in.

Using past customers as a blueprint, Cantor said signs like a professional website or a large social media presence can signal that a company takes its product seriously and will soon take off in a given industry, even if it hasn’t completed any sales yet.

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For example, Shipfusion recently partnered with a dietary meal plan blog that wanted to sell supplement bars catered to different diet plans. While the blog owners hadn’t sold a bar yet, their blog had a strong following that indicated it would thrive and need Shipfusion’s fulfillment services.

“Being able to identify companies that are up-and-coming is a very important skill to have if you’re in sales in this industry,” Cantor said. “Sometimes you roll the dice on these smaller companies and they turn into massive accounts.”

If there is sales data, the salesperson is looking to see how many products are in an order and where the shipments are sent. The data and conversations with the client help Shipfusion determine how many warehouse workers are needed to staff the account effectively and whether it requires multiple warehouses.

Ultimately, finding the right fit comes down to a lengthy matchmaking process that can take anywhere from a few days to a year, if it’s an enterprise customer, to make sure both parties are set up for success.

 

Shipfusion Customer growth Stock
Image: Shutterstock

Scale the Company Around Customers

Cantor likes to think of Shipfusion as a customer’s last stop in finding a fulfillment center. In fact, many of its early customers remain with the company.

As the firm continues to grow, it’s also adding additional features to serve its existing and future partners. Shipfusion is in the process of consolidating its three Chicago-area warehouses into one and is looking to add another warehouse in New Jersey. The company has also expanded into controlled-temperature shipping to cater to its nutritional supplement base, opening it up to those that sell chocolate-coated products.

“The greatest thing when you build a strong customer base is that you start to get referrals, and those referrals are a fit 95 percent of the time.”

Meanwhile, it’s also expanded its software capabilities to allow for real-time product tracking on the seller’s own website.

None of this would be possible without a strategic customer approach. And in a sign that the company’s strategy is working, it receives frequent referrals.

“The greatest thing when you build a strong customer base is that you start to get referrals, and those referrals are a fit 95 percent of the time,” Cantor said. “I love starting those conversations and I love getting referrals. It’s a testament to what we’re building.”

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