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Target markets focus marketing and sales efforts towards the companies and people
most likely to buy your products and services. A good target market selection creates
an optimum environment for marketing campaigns to be successful.
However, most small and mid-size companies give only scant attention to the discipline
of mining a target market. In more cases than not, highly segmented target markets
get used that represent a small portion of the actual available market. Companies
fail to properly slice up the whole before getting into the parts.
A good methodology is to introduce profiles of the four broadest markets. Each profile
defines potential target markets for sales opportunities. From the profiles you
create targeted lists. You apply lead generation techniques to convert sales cycles
to transactions. The four broadest market profiles are 1) Non-Customers 2) First
Time Buyers 3) Customers 4) Loyal Customers
1. Non-Customer Profile
The Non-customer profile is someone who has never been a customer of your company's.
These are the companies who are in a demographic range of variables you think make
them likely prospects for your products or services. Because the non-customer market
is so broad, you may have several different sub-markets within the category of non-customer
markets.
What are the variables for selecting target markets? We have to be realistic about
our market selections. There are many models being promoted to assist in market
selection. The reality is that five primary segmentations account for 90% of the
differences in a market.
- Standard Industrial Codes
- Geography
- Population
- Type of Business
- Employee Size
2. First Time Buyer Market Profile
The First Time Buyer is a person or business has purchased your products for the
first time. A First Time Buyer is a very unique relationship. It is actually the
most perilous relationship in your company. The First Time Buyer has taken action
but is generally not committed to your company or your product. The value of your
product has yet to be fully adopted. The relationship is still tenuous and risky.
You pay to acquire new buyers through your advertising, promotion and selling. A
primary goal for First Time Buyers is to re-enter them into a sales cycle to convert
them to customers.
3. Customer Market Profile
The Customer Market Profile consists of companies or people who have purchased from
you more than once. Customers presumably have a deeper relationship with your company
than First Time Buyers. There are several good methods for segmenting your customer
base. Here are a few of the categories used to separate your customers and identify
the most profitable relationships.
- Frequency. How frequently the customer purchases from you.
- Recency. How recently the customer purchased from you.
- Duration. How long the customer has been purchasing from you.
- Intensity. How much the customer purchases from you.
4. Loyal Customer Market Profile
A Loyal Customer is a customer with a successful track record with the company and
has been purchasing from you for three years or longer. Loyal Customers are your
best customers. They have the best track records in terms of frequency, recency,
duration and intensity. They provide positive value return in the form of referrals
and testimonials. A primary goal of every business is to build loyal customers.
The four market profiles presented are very broad but are powerful when applied
to your marketing strategy. Each profile creates a powerful relationship opportunities.
Within each of the profiles sub-divisions of marketing are easily created. It helps
to create a broad brushstroke of target markets before getting to the fine detail.
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