Tuesday, September 29, 2009

12 Great Reasons to Know Your Target Market

I was speaking with a potential client the other day and asked THAT question…”Who is your target market?” As a provider of telecommunications equipment, his response was, “Anyone who has a phone!” While that may seem like a good answer, the reality is that it is completely unfocused and undoubtedly wastes thousands of dollars in marketing costs and tens of thousands of dollars in opportunity costs. After all, would you rather spend your valuable time with a prospect who buys 70% of the time, or one who buys 15% of the time?

The reality is that no matter what business you are in, no matter what product you sell, you can take a look back at your customers and very quickly determine the characteristics of those most likely to purchase your product or service. Why is this important? Let’s say you do sell telecommunications equipment like my prospect. When you examine your sales history, you find out that 80% of your customers have between 10 and 20 million dollars in sales, have more than 15 employees and are sole proprietorships. So you now know with indisputable proof that for whatever reason, a sole proprietor with $12 million dollars in sales and 20 employees is much more likely to buy from you than a partnership with $5 million in sales and 10 employees. How important can that be when planning your lead generation and conversion tactics?

Let’s briefly discuss defining some prime market segments, specific geographic markets, sizes and trends, characteristics of people and 12 very important reasons to profile your target customers.

1 – You will know how to communicate your message with a minimum of confusion when you basically know who your customers really are and deliberately set out to attract them.

2 – You will better able to decide how to market your product or services, if it’s going to be direct mail, newsletter, direct sales, cold calls etc.

3 – You will know what additional services that your potential prospective customers or clients will want and expect from you.

4 – You will know basically what your target customers are willing to pay.

5 – You will know what your target customers will expect in terms of quality.

6 – You will know where large groups of target customers are located so you can market directly to them.

7 – You will know who else is after your target customers business.

8 – Your customer will help you define your true market.

9 – It will identify where it’s possible to survive and prosper.

10 – When human needs aren’t being met, you’ll find a widening gap in the market and the key to opportunity.

11 – You will learn simple techniques that will help you gain insight into consumer behavior.

12 – It will be very important because you’ll be able to conceptualize your overall market.

Does this mean that we sell ONLY to our target market? Of course not! And does it mean that you give up on those outside your market? Again, a resounding NO! What it does give you is a place to start. When you aren’t sure WHY people outside your customer base aren’t buying, the first thing to do is to target prospects that have the same characteristics of your current customers.

The second, later thing to do is to find out WHY those outside your base are not buying and see if you can change that. It may be as obvious as no one under 30 buying your wrinkle reducing cream, but most likely it will be much more complicated. Once you are able to determine the reason for a particular group ignoring your sales message, you can address that issue.

By Greg Beverly

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