Grow Your Business In 5 Days
- Video Training Course - Video #5
TARGETING THE RIGHT CUSTOMERS
Hello and welcome to ‘Grow Your Business In 5 Days’.
Whereas the previous 4 tutorials focussed on why businesses stop growing and how to maximise sales and profits from EXISTING customers, clients or patients, the next 5 tutorials will show you how to acquire a constant stream of NEW enquiries with the final 3 tutorials concentrating on how to convert these new enquiries into customers.
This next strategy is without question THE most important when it comes to generating enquiries and acquiring more customers and it’s the one that virtually EVERY business gets wrong. Get it right and you’ll attract the right customers at the right prices. In many respects this strategy is the ‘holy grail’. Every business searches for it with only a very few ever finding it!
You probably know what it is, but if you’re like most business owners, you’re definitely not doing it right! It is identifying your Target Market.
To get the very best possible results from all the other strategies I’m going to reveal to you over the next few days, you must first, and definitely most importantly, clearly identify the type or types of businesses or people you are looking to target. The ideal Target Market is a clearly identified group or groups of people or businesses that…
❶ Need and more accurately ‘want’ your products or services
❷ Can be easily reached by your marketing efforts
❸ Can afford to pay for your products or services
❹ Have similarities, known as demographics or characteristics that enable you to ‘group’ them together so they can be targeted easily
Most business owners try and be ‘all things to all men’. Yes, there is limited success using this approach, but by focusing on one or more carefully chosen target markets you’ll be far more successful, and this success will be achieved much quicker than with any other approach.
So why do so many businesses try to be all things to all men?
In most cases it’s because they’re afraid to ‘limit’ the number of businesses they specifically target. They think if they reduce the number of prospects, they’ll risk their whole livelihood! Nothing could be further from the truth. Let me explain…
I’m often asked – “If I limit my market, won’t I be reducing the chances of doing business with more people?” To be frank, yes you will. But to succeed in today’s economy and competitive market place you need to concentrate your marketing on a small number of well-chosen target markets or niches, into which you pour your marketing resources. Of course, by focusing on a smaller group or groups, you may miss business from outside the target group. But what actually happens is you increase the amount of business you receive from within the target group; those more suited to buying from you.
This is because you are specifically meeting the target market’s needs and requirements. You are saying to them that you are THE business who knows about their situation – their problems – and their concerns. No other business specifically meets their needs in this way and therefore your business is seen as the logical company to turn to.
For example, this course is tailored to small businesses. We understand what every small business owner goes through from start-up to growth and through to exit. We understand the problems, challenges and sacrifices made along the way. That gives us the ammunition to create products, membership programmes, services and this course specifically suited to small businesses. Frankly I don’t care if we’re missing out on medium and large businesses. We don’t focus on them, and large businesses are very different animals than small businesses.
Furthermore, our Accountants Growth Programme is arguably the world’s most successful sales and marketing programme for small to medium sized accountancy and CPA firms. The reason for this is because we specifically target and spend our marketing budget looking for these types of ambitious accountants and CPAs. They naturally gravitate to us if they’re looking for a way to grow their firms.
And SWARM our social media management service is again focused on helping small businesses grow using social media. We actively discourage medium and large businesses from ever contacting us. In fact – we tell them openly ‘IT’S NOT FOR THEM’.
Often it only takes small shifts in your marketing message to get it right. Ideally you should define what your target market is BEFORE you do anything else. This diagram shows the mass marketing approach…
This red circle represents the market universe. In other words all the people or businesses that could buy your services. These black dots represents the people or businesses who are in a position to buy. And the white space represents the people or businesses that are unlikely to buy, but they all receive the same marketing message from you.
Notice you have to spend much more money to get ‘lucky’ and hit the right people or businesses.
So what’s the result of this approach? First there’s a high cost to reach buyers. Second, response is low because you’re targeting everyone with a ‘mass market’ message – i.e. it doesn’t directly appeal to the buyers. Third, greater effort is required to qualify out bad prospects – if you’re targeting everyone, you will also get a large number of poor prospects. When you see it shown like this it makes sense why so many marketing campaigns fail and so many businesses really struggle to grow. Nothing is working in your favour.
To emphasise the point further, I’d like to show you some video footage of a guy called Joshua Bell. He’s one of the highest paid and greatest violinist’s in the world. As an experiment for The Washington Post he played in a D.C Metro stop during rush hour to see who would notice him and who would stop and give him money. I love this demonstrates what happens when you apply a mass market approach to your marketing. You’ll see why shortly. Here it is…
As you can see, the mass market approach i.e. in this case targeting all commuters with few, if any real music enthusiasts, yields poor results. Of course location plays a big part in this too, but as you’ll see shortly there are many factors you need to consider when identifying your ideal target market.
Now let’s take a look at the target market approach...
Once again the red circle represents the market universe. This blue oval is the target market. These black dots represent the people or businesses outside the target market who are in a position to buy. You can’t hope to ‘catch’ everyone. There will still be other people or businesses outside the chosen target market that we ‘miss’. But notice how few there are.
These green dots represent the people or businesses inside the target market which are right now in a position to buy. See now that by concentrating your efforts on a carefully selected target market you ‘capture’ a high proportion of potential buyers. The message is completely focused on this group so response is increased significantly.
So what’s the result? Identifying a target market gives us the ability to concentrate our efforts on a smaller, more targeted group or groups. That means we can spend more on targeting each prospect, or even enables us to cut our spend. It also increases the likelihood of a sale and enables us to quickly capture a big slice of this group.
You don’t have to restrict yourself to just one target market either. You may find it necessary to focus on two or more target markets depending on the products or services you provide. Once you have identified the ideal target markets, you would need to ‘speak’ and ‘communicate’ differently to each one.
Here’s a simple but very powerful example of why defining your target market is so important…
Let’s say a start-up business needs an accountant. They see two small ads in their local newspaper. The first one reads…
The second ad reads…
Which accountants are they likely to choose? The answer is obvious. If you can create this bond between your business and the target market I can guarantee you’ll grow your business quicker than you could ever imagine. So how do you define your target market or markets? Well we’ve created a very simple diagram showing the key characteristics you should look for…
Here’s a more in-depth look at each characteristic… First, is the ‘Industry’:
If you sell to businesses, what types of businesses do you want to target? Are there some industries that you want to stay clear of? There are three key factors which influence the selection of the industry…
1. Your own industry experience - You may want to target industries where you already have experience.
2. Your industry credibility
3. And your likes and dislikes
The next characteristic is ‘Decision Makers’ - An important consideration is choosing customers with a simple decision making process. Once again if you’re selling to businesses, clearly the larger the business, the more likely the greater number of decision makers, which, generally makes the sale more complicated. Of course this depends on what you’re selling and to who, but remember it’s always easier selling to fewer decision-makers!
When selling direct to the consumer, always take into consideration that the man and the woman can influence the sale. Don’t just sell to one person. This applies equally when selling to family businesses.
Next is ‘Age’:
Clearly there is an age range of businesses from start-ups to well- established companies. Obviously start-ups come with a number of challenges especially the fact that 80% of them fail in the first 5 years. So are you bothered about how well established a business is?
If you’re selling to consumers, their age will often be a key element and one that you should look closely at. What age range of people buy most frequently from you? What age range spends more per sale with you? Note, these are two very different things. And remember there is a larger and continually growing group of retired people with significant spending power. Is this a group you could tap into?
Next is ‘Turnover Or Number Of Employees’ - Both these characteristics are easy indicators for choosing your target market if you’re selling to businesses. But just because your customers may range from start-up to say $2m or $5m or even $20m turnover (or more) doesn’t mean you should target this range. What you need to do is look at your existing portfolio of customers and analyse the turnover range. For example you may have 20% of customers below $100,000, 60% from $100,001 to $500,000, 15% from $500,001 to $1m and 5% greater than $1m.
In this example, whether you like it or not, at this point in time, your business is good at acquiring, keeping and servicing customers with a turnover from 100,001 to 500,000. This represents your ‘low-hanging fruit’. These are the easiest businesses for you to acquire – at the moment anyway. Of course you may need to go after a different segment of the market. If you do, just remember it often takes longer to do this but as long as you apply the strategies in this course, you’ll penetrate the market faster than you would have done any time previously.
Next is ‘Location’ - Proximity is often an important decision for many business owners when choosing their suppliers. Again this depends on what you sell and where you sell it. For example, we know for a fact that when people are choosing their accountant, 90% of business owners choose one within 10 miles of their own business. You also need to factor in the ease of which you can service businesses further away from you.
If you sell to consumers you need to look at the demographics of where they live. Are your customers living in rented accommodation, or do they own their homes? Are their clusters of customers in certain areas? If so what characteristics define them?
And finally, Other Demographics & Psychographics - There are many other factors that you may need to consider depending on what you sell. For example, if you sell to consumers the following factors could help you target more accurately...
- Household income
- Number of children
- Number of cars
- Type of cars
- Schools attended by children
- Job type
- Magazines they read and subscribe to
- And so on.
The more information you can use and apply – the easier it will be to define and accurately pinpoint your best target markets, cutting out wastage and maximising the investment you make in your marketing. Ultimately, if you can get inside the heads of your target market and pre-empt everything do to with buying your product or service, you’ll create an amazingly successful business.
And to really ram this home, I’d like to show you a light-hearted look at the impact you can have on your customers once you get inside their heads. This is a clip from the Mel Gibson film ‘What Women Want’. He plays Nick Marshall, a womanising advertising exec in one of New York’s biggest agencies Unfortunately because most of the execs are men they are missing out on hundreds of millions of dollars in ad revenue from female brands. So the agency brings in a woman above Nick called Darcy Maguire, played by Helen Hunt in order to break into the female market.
The first thing she asks Nick and the team to do is to assess a number of female products that right now are being pitched for, and for each person to come up with an advertising slogan for each of them. Anyway, Nick goes home and starts trying on the make-up , fishnet stockings and hair products and as he’s drying his hair with a hair dryer, he slips, falls into the bath and electrocutes himself . He wakes up the following morning being able to hear the thoughts of all women. The clip starts with Gibson going to see the brilliant Bette Midler, playing his shrink, because he thinks he’s going crazy…
I love that film, it’s so funny. Anyway, did you see how he managed to get a date with Marisa Tomei. He heard her thinking about the fact that she doesn’t want to get hurt and wants to take things slow. Nick reinforces this and low and behold because he really resonates with her feelings, she not only agrees to the date but asks him to meet her that evening. That’s the power of target marketing and what you can do when you really understand your market.
So let’s recap...
Here are the key learning points from this tutorial...
- First... Identifying your target market is THE most important thing you can do when it comes to generating enquiries and acquiring new customers.
- Second... Once you know and understand who you’re targeting, you can connect with them on a much more personal level meaning you’ll automatically draw them to you and away from your competition.
- Third… Use the Target Market Characteristics to identify the profile of your target market or niche.
Now please DOWNLOAD the ‘One Page Action Plan’ that accompanies this tutorial and start putting together your perfect target market. These are the people or businesses that you’ll be concentrating all your marketing efforts on. Alternatively, take the short-cut and join the BGS Vault. No matter how long you’ve been in business, you won’t have seen anything like this before. If growing your business is important, then I urge you to at least give the BGS Vault a try. (Note : as a client of the firm you will get free access so no need to sign up just contact the office.)
Start by entering your name and email address on the right of this page to watch the FREE video presentation. Thanks for watching. See you again shortly.
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