Focus on your Target Market!

It is fascinating to work with different businesses and to see how they approach their customers. There are those who are on the treadmill, working harder and faster taking in anything they can lay their hands on just to get turnover (the die hards). Then there are those who sit and focus on who makes a good customer and then commit unstintingly to seeking, attracting and converting those that they know are going to take them where they want to go – from financial, production capacity and market share perspectives (the seekers).

What are you? Of course it’s open to debate where the focus should be; externally or internally? I believe it is a balance between the two (and no I’m not sitting on the fence!). Having seen both sides of the coin many times, too much focus in one area leaves your business weak and susceptible in the other and, quite honesty, a ladder with one weak leg is still dangerous – it doesn’t really matter which leg it is!

However, everything in business starts with who is going to buy your product or service. What do they want, what are their expectations, what is their level of understanding of what you have to offer and are you able (or willing) to satisfy – and exceed – their needs in order to build sustainability in the market place?

When last did you take a look at your customer base and determine how many good customers you have? A good exercise is to do is a quick Customer Grading Matrix. Here are two ways of doing this:
1. This first method is good if you have an established client base with regular repeat purchases and want to assess their worth to you as a company. Take a piece of paper and divide it into 4 quadrants making a square. Determine what the X and Y axis are going to be (turnover monthly/annually, payment method, level of useage (units/time/range), loyalty level, location etc. The selected X/Y axis definitions should be the two most critical characteristics you require in your clients. Then, plot your clients accordingly to see which quadrant each one of them sits. Analyse the picture created and then plan your course of action going forward.
2. This second option is good if you need to increase your customer base and need to ensure you pull on-board more good customers. First, determine the characteristics that you believe make a good client. The same criteria as mentioned above can be used, however, this time create a quick bar chart eg one characteristic per bar (you can have as many as you need). Allocate a set number of “points” per category eg 10, and then rate each client, out of 10, for each of the characteristics you have settled on. When you start making contact with a potential client, quickly run them through your characteristic scoring mechanism (the bar chart) and see how they rate. If they score 80% or above you know they’re good for you, 60-80% look at what characteristics are pulling them down and determine whether or not these are critical, 50% or less you really need to take a close look to ensure you are not going to be running hard but getting nowhere!

How often do we find we are putting a lot of time, effort and resources into pulling on board customers who are not good for us in the long term? Our short-term turnover focus blinds us to the long-term value and ROI (or ROE –Return on Effort).

There is nothing more rewarding than having a sustainable business built on a win/win of you taking your clients where they want to go while they are taking you where you want to go. After all isn’t that what we are really all striving for?

Yours in marketing

Dianne

Marketing Strategy – What is Marketing Anyway?

I thought I’d start with this quote:
“Just when I found out the meaning of life
they changed it!”
George Carlin

This sounds a bit like marketing! Just when we seem to get our heads around what to do and when to do it, the market changes. It’s incredibly inconsiderate and costly, not only from a financial perspective but from a time and resources one as well.

Why can’t people remain loyal and committed? Why don’t customers stop asking such inane questions and just pull out their wallets and part with some of that lovely folding stuff!

Well, I guess it has something to do with the times we live in. Customers get inundated from every which way to buy this, try that, switch to the other – how do they decide what to spend their money on? And, more importantly, how can you ensure it is you that they decide to support?

It’s a growing dilemma and the only thing that is certain is that change is guaranteed and here to stay.

There are a number of different takes on what to do when times are tough and the dilemma has different “takes” for different types of people. Let’s visit some of them:

The Accountants Take:
“Our expenses outweigh our income, we must cut expenses”
The Production Take:
“Our widgets aren’t selling, we must make more so we can reduce the costs & discount”
The Sales Take:
“Our current customers aren’t buying as much; we must get out there and find more customers”
The Administrative Take:
“Man this place is heating up, nerves are frayed and we better look busy and stay below the radar – cause heads could fly if things don’t change”

Yes, this is meant slightly tongue in cheek but there’s some truth in the generalizations. Now of course I’m going to give the marketing perception, because if I didn’t you’d be disappointed!

The Marketing Take:
“Times are tough and we don’t seem to understand our market and their changing needs well enough, let’s get out there and listen to what they have to say and then adjust our systems and structures to give them what they’re asking for!”

The key is to ask the right questions and the answers will reveal themselves. Find out why people buy your product/service, when, what need does it fulfill, what emotional state are they in when they purchase, what leads them to decide they want/need what you have to offer, if/how they influence other people to buy, what happens after they’ve purchased (can you build ongoing/repeat business), determine who uses your product/service vs who the decision-maker is, and who initiates the purchase vs who can influence the buying decision!

Only by understanding these, and many more basic marketing questions, can you even begin to understand your customers and their mind-set.

Only then can you begin to address the critical issues that will assist you in getting them returning to you again and again.

You see The Accountant’s Take, cutting costs, could the right thing to do but it will only provide a short term solution and will not enable you to capitalize on potential market opportunities. The Production Take will not assist if the marketing is moving, again you may get short term sales volume increases but you could end up with a warehouse full of widgets you can’t give away. The Sales Take could be a good one and provide a solution but only if the sales team know what they’re doing and who they’re talking to. Otherwise they’ll come back very demotivated that every door is closing in their faces. And, The Administrative Take is very dangerous because people become too scared to offer ideas and suggestions for fear of being fired first. Imagine the negative energy in a company where everyone is watching their back instead of watching and serving the customers!

Marketing is about listening to the market place and assessing how you can capitalize on the needs, wants, desires of your target market. Only once you are doing this can you start to react quicker to changing trends and start anticipating and pre-empting them.

Also, only then can you say – mmm this marketing thing – I think it can really add value!

Happy Marketing
Dianne Perrett