subject: Small Business Marketing: Understanding Your Ideal Customers [print this page] Not all customers are ideal customersNot all customers are ideal customers. The truth is there are customers who are costing you time and money. There are other customers that are profitable. When making the decision on where to spend marketing dollars, to the extent possible, you want to focus on contacts that fit the ideal customer profile.
This is an investment. So make the smartest investment and look to attract customers who value your products, services and expertise. These are the customers who do repeat business with you. These are the customers who readily refer your business.
One of the pitfalls of trying to be all things to all people is that when you talk about your business, the message has to work with the lowest common denominator. As a result your message becomes vague and generic, failing to capture the imagination of anyone. You want a message that resonates with particular clarity to the recipient. The message tells them that you understand them and can deliver what they need.
Unfortunately the fear among many small business owners is that if they don't cast the net wide, they may not get any inquiries from their marketing. I've seen people invest in large campaigns thinking that if they only get a fraction of a percent response, at least they will get something. It rarely works that way or it only serves to attract unqualified prospects that are not a fit for your products and services.
You will have better results over time if you market to 100 people 10 times rather than 1,000 people once.
Remember you have to develop credibility with this group. Right now they don't know you. The quickest path to credibility is an ongoing campaign where you build their trust by demonstrating you understand what they need. It's going to take more than one attempt to communicate this message which is why marketing to large diverse lists is a waste of money. You can't afford to market to the unqualified. By focusing on the qualified, the list will become smaller and allow frequent outreach. When that ideal customer visits your website or takes that call from you, you will be better positioned for a meaningful discussion with much greater odds of closing the business.
How do you identify your ideal customers? First and foremost they value you. They are not beating up on your staff. They do repeat business. They refer business to you. Make a list of those people. Are there characteristics that they share? Some of these characteristics may be traditional demographics: zip code, income, SIC code, number of employees, years in business, etc.
Look for more subtle characteristics as well. To give you an example: I was responsible for marketing a software solution for nonprofits. The universe of nonprofits in the United States was 1.5 million. I didn't have a multi-million dollar budget. So I pared that list to about 80,000 just based on their annual budget. Then, based on interviews with my best customers, I was able to identify some subtle differentiators. My ideal customers were organizations who had more than 5 funding sources and had a professionally trained accountant/finance director on staff (someone who would not have sticker shock when seeing the price of the software because they would understand the ROI). Those two characteristics dropped my list down to 50,000. I further segmented the list into like organizations resulting in much smaller lists of between 500 and 3,000 contacts.
Then I did some testing. I did monthly mailings to a segment of both the smaller targeted list and a segment of the larger diverse list. The smaller lists had much better results with response rates of 12 - 30%. The larger list had response rates in the single digits with much lower conversion rates.
The reason the smaller lists campaigns performed so much better was that the message was specific to the recipient - it was all about them and the challenges they faced every day. By writing about them in the language of their niche, I more quickly gained credibility with the recipient. I did not have the same ability with the larger list. I had to use more generic language, more generalized business scenarios.
Don't succumb to the false notion of safety in numbers. Start small and targeted. This will allow you to be more memorable, valuable and frequent in your communication and more quickly earn credibility and interest. Take the time to profile the ideal prospect. The next step then becomes a little easier: Where do I find more people like this?
by: Dawn Westerberg
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