Best-Practice Marketing: Divide and Conquer
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Segment and target your way to optimized marketing that produces sales.
[/vc_column_text][vc_separator color="custom" align="align_center" style="dashed" border_width="" el_width="50" accent_color="rgba(96,50,10,0.5)"][/vc_column][/vc_row][vc_row full_width="" parallax="" parallax_image=""][vc_column width="1/2"][vc_column_text]An increasing number of entrepreneurs are taking a cue from Julius Caesar: They’re dividing (segmenting) and conquering (targeting) their empires. Saturation marketing is dead. The cost-cutting frenzy of the ’90s startled many business owners into realizing that they were wasting thousands of dollars on blitz campaigns aimed largely at unlikely customers. That shot-gun marketing approach has since evolved into target marketing, a critical element in the success of emerging-growth companies. The concept is simple: First, segment the market into groups that would predictably buy your product or service. For example, if you sell high-end sports equipment, isolate consumers who have demonstrated an interest in sports and have purchased higher-ticket items. Why waste time aiming at unemployed couch potatoes? The trick: Identify the aspects of your product or service so that market segments can be quantifiably and accurately "matched." Next, target your list: Once you’ve figured out who’s likely to buy, analyze those segments carefully and tailor a marketing mix of special offers, incentives and promotions — according to what you learned about your most promising prospects. A Universe of Ideal Customers Where do you find this goldmine of ideal buyers? Start with your own database, which contains a compilation of current customers and worthwhile prospects, as well as rented lists. Got database? Thanks to the advent of affordable software, smaller companies can keep up with the Fortune 500 — at least on the database front. You can organize and cross-reference customers by zip code, product interest, dollar value, buying frequency … whatever criteria helps you to better target potential customers (and sell more product). If you don’t have a database, get a software program and create one with these basics:- Consult point-of-sale records and develop profiles of ideal customers, buying patterns and name/address/purchase-history information.
- Commission a customer survey to supplement basic records with demographic and psychographic information. Use incoming calls as an opportunity for customer service reps to ask pointed survey questions that fill in the blanks.
- Include all imaginable criteria; it’s easier to include at the start than add on later. A consultant can help here, but at a minimum you should be tracking name/address/phone information, purchase history (date and product details), inquiry history, dollars spent per customer, purchase frequency, customer comments (coded) and service-rep notes.
- Do you need a firmer grip on how prospects perceive your product category, its lines and buying patterns? Focus groups may be the way to go; large-sample, random surveys will cost more, but they provide more statistically reliable data. It depends upon your needs and resources.
- Do you want to confirm a trend or theory about market direction? A telephone survey may be in order, as may an industry review or feasibility study.
- Need to do product testing? Conduct blind tests (in which brands, packages and product names are not revealed to the test subjects). Look for statistically reliable results at the 90%-95% confidence level. If you’re past the infancy stage, you can commission a prototype field test.
- Impose strict limits on the project, both in scope and budget. Get acknowledgment in writing from the research firm. If they "don’t do contracts," head for the door.
- Anticipate extras and obstacles, and head them off before they add line items to your invoice.
- Cutting corners means sacrificing varying amounts of validity. Be prepared to accept lesser statistical "oomph" if your budget precludes replication of the study, a totally random or large sample. But it’s not necessarily the end of the world. Sometimes the cost doesn’t justify validity to the nth degree.
- Staff interviews. Glean valuable input from your customer service representatives and front-line sales personnel. They probably know your customers better than you do.
- Secondary sources. Talk to your distributors, buyers, manufacturers and suppliers. What do they observe about your customers? Request material from subscription-information services, trade associations and industry experts. Also investigate information offered by the U.S. Census Bureau and other government agencies. Online resources abound; search and you shall learn.
- Watch your competitors. If they’re succeeding at something, "borrow" it. Why reinvent the wheel? During its biggest expansion period, Burger King spent virtually nothing on site location. They just built wherever there was a McDonald’s. Brilliant.
- Do a needs analysis. What are customers asking for in your current line? What do they want that you don’t yet have?
- Always ask "Why?" Why do our customers buy from us? Why don’t they buy from our competitors? Why do customers continue buying from us?
- Are senior execs always involved in the decision-making process?
- What’s the best way to get an appointment with a senior exec?
- Why do senior execs agree to see a salesperson?
- What makes a senior exec say "yes"?
- How does a sales rep establish a long-term buying relationship with a senior exec?
- More than three-quarters of senior executives become involved early in the buying cycle and again at the end, but rarely in the middle.
- The most direct line to an appointment is via an inside referral.
- The promise of value will gain an appointment. During the first meeting with a senior exec, salespeople must convey their accountability and prove that they understand the customer’s business goals and hazards.
- Senior executives like to "test" persistence. Once a salesperson overcomes that, he must prove the value his product or service provides. Only then is a "yes" possible.
- Long-term relationships depend upon the salesperson’s ability to demonstrate his comprehension of crucial business factors, his ongoing level of accountability and his problem-solving skills.
- Direct mail.
- Telemarketing.
- E-mail (within spam restrictions).
- Web advertising.
- Local newspapers.
- Cable television.
- Billboards.
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Articles in our Entrepreneur’s Resource Center appeared in print and online newsletters published previously by the foundation. More than 1,000 articles can be found in the categories below, addressing timeless challenges faced by entrepreneurs of all types.