Target Ideal Customers Through Marketing: A Strategy For Small Business

Not 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.

Hope attached to large numbers is false hope. There is the fear that if the marketing net is not cast wide, nothing will be hauled in. A more targeted campaign makes more compelling messaging possible. More compelling messaging brings more qualified prospects.

The truth is you will have better results marketing to 100 ideal contacts 10 times, than 1,000 random contacts once.

You need to develop credibility with your future ideal customer. The first time your marketing message is heard by them, they don’t know you. Why should they believe what you have to say? The quickest path to credibility is a targeted message that communicates that you understand what they need. You will probably need to communicate this message more than once. Do you see how you can’t afford to do that to every possible prospect? By paring the list down to a smaller number, those who would truly be ideal customers, it is possible to have a meaningful, trust building, value-providing, frequent outreach to them. When that ideal prospect picks up the phone and calls you, or is willing to take your call, you will be in for a more meaningful discussion with greater odds of closing the business.

What are the characteristics of your ideal customer? First and foremost they value you. They are not making life miserable for you or your staff. They do repeat business and they refer business to you. Make a list of those customers. Are there characteristics that they share? It might 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 did so much better was that the message was specific to the recipient – it was all about them and the challenges in their world. By writing about specific challenges, 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.

Starting small and targeted is the best use of your limited marketing dollars. It will allow you to be more memorable, valuable and frequent in your outreach to ideal future customers. Once you have identified the ideal future customer, it is a much easier exercise to take your marketing to the next level, which is “Where do I find more people like this?

Learn more about keyword #1. Stop by Dawn Westerberg’s site where you can find out all about strategic marketing for small business and what it can do for you.