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Marketing 101d

This is the fourth installment in a series of basic marketing concepts.  First we described what marketing is, and what it is not.  Then we talked about the problem your service or product will solve, the need it will fill, or the want it will satisfy.  Next we talked about a competitive advantage and why you need one.  Now we need to talk about the “who” in the marketing equation.  We may think we know exactly who our customer is, but research shows otherwise.  Too often we waste a lot of time and effort chasing prospects who are never, ever going to buy from us.  For more on this, please read below.

Who has a problem to be solved, need to be filled, or want to be satisfied and is a good “fit” for what your company does?  No product or service has universal appeal, so we need to understand who our prime prospect (ideal customer) is so that we can focus our sales resources precisely and not waste them with a shotgun approach.  Here are some things to consider as you think about who you are trying to serve.

  Are there geographic limitations?  Maybe your product or service only has value within a certain geographic area.  Or you might be limited by distance.  A local plumbing contractor, for example, may only be able to effectively serve customers within a 20-mile radius of his shop.

● Are there ethnic or cultural factors to be considered?  Some foods, for instance, might be very popular in one culture, completely unacceptable in another.

● What about age?  Does your product or service appeal equally to a 15-year old and a 55-year old?

● How about gender?  Does your product or service appeal equally to men and women?

● What are your prime prospects willing to pay for your product or service?

 If your targets are other businesses rather than consumers, age, gender and ethnicity may not be as important as other considerations such as:

● What kinds of businesses use your product or service?

● Within those target businesses are there size considerations?  For instance, if you’re selling software, can you serve everyone equally, or only those with 20 to 75 computer users?

● What about payment terms?  If  you need to be paid within 45 days to maintain positive cashflow, you may want to avoid customers who demand 120-day terms.

The list goes on and on, but you get the idea.  You need to know as much as possible about your prime prospects . . . who they are, where they are, what they like and don’t like, how they behave, and how they make buying decisions.  And once you know everything there is to know about your ideal customer, the final key question is: are there enough of them to support your product or service?

Understanding everything you can about your ideal customer is critical.  If you don’t have a clear picture of who they are, how can you reach them?  How can you attract their attention?  How can you tell them your product or service even exists?  You can’t . . . at least not efficiently.  As a small business owner, you can’t afford to waste advertising and promotion dollars on targets who are unlikely to buy from you, nor can you waste scarce sales time calling on those people. 

There can be many reasons that an individual sales efforts fails to close a sale, but over time, if the percentage of prospects you are able to close is too low, it’s likely that you are simply targeting too many of the wrong prospects.  So you want to improve your closing rate?  Just get a better understanding of who is really a legitimate target for your business.  Like many aspects of marketing, this may take some up front time, effort, and maybe money to research, but it’s worth it.  Any resources spent here are miniscule compared to the expense of offering a poorly targeted product or service that misses the mark and ultimately fails.

 
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