Developing Target Markets
Often, people describe target markets using descriptors like male or female, or families or couples, sometimes people use age, proximity or type of business, maybe even industry types. This is a good start, but we need to look deeper.
Many times, we witness ourselves targeting anyone that might want to use what we offer, and we forget that we want to focus our time and energy on finding the RIGHT customers, not just any customer. I am sure that you have some great customers ‘A clients’ and some not so great customers ‘C clients’.
So, what do those great customers look like?
Here are three methods you can use to profile your target markets to help you understand what your RIGHT customer looks like.
1) Demographics
This is probably the most used method for trying to create a target market. Characteristics like gender, age, income, education, geography, ethnicity and so on are used to filter out who do not want to speak to. The thing is, this dos tell us much at all with regard to our target market. Picture this; two mothers of two children each, each making the same amount of money, in the same community, with the same education, and both the same age. Now picture that one mother prefers to be frozen dinners and the other shops at the farmer’s market. Demographically identical, yet complete opposites from a consumer perspective. This means we need more.
2) Attitudes
This helps us understand how our RIGHT customers think. Think about your IDEAL customer, someone that works with you now, what do they look like? How do they think? What value do they perceive about you and your product or service? Do they value professional advice? Do they want the least expensive option? Do they want quick delivery? Are they too busy to do it themselves? Do they want special attention?
We need to ask them, “Why do you work with us?” and then write it down and ask the next IDEAL customer. Once we understand why our customers work with us, and who they are, we can begin to understand how to speak to them.
3) Situations
Typically, they are action triggers that put people into decision making processes regarding a purchase. A couple might by a new home and need to fill it with furniture. A high school student might be graduating, and need a dress for Prom. What are your action triggers? What situations are your RIGHT customers in, when they decide to buy from you?
Once we understand what action trigger makes someone want to buy, we can begin aligning ourselves with groups, events, or other businesses that deal with those action triggers.
A furniture store might create alliances with banks, real estate agents, or mortgage brokers. A dress boutique may approach the school board with a proposal for their students, or align with banquet halls in the area.
The idea here is that we need to spend time trying to understand our target Market. So much so, that we can determine where and how to communicate with our potential RIGHT customers. Not just any potential customer. The more time and energy we waste on targeting potential ‘C’ clients, the harder it is for us to grow our businesses the way we want to.
Saturday, October 30, 2010
Thursday, August 19, 2010
The Value of a Brand
Creating and maintaining a brand can be difficult to do properly. What many forget is that all businesses have a brand. However, some are stronger than others. If one has planned a positioning strategy and designed a brand to reflect that position, as well as reinforced the brand to create clear expectations and familiarity in the marketplace, then one is maintaining a brand well.
On the other hand, one may decide not to place any resources into designing and maintaining a brand. One may operate their business daily, focusing on the daily transactions and customer encounters with little to no energy focused on brand strategy or planning. This also creates a brand, a very weak brand.
This article explains 3 benefits to creating and maintaining a strong brand. It should be noted that these benefits pertain to local businesses just as much as they do for larger organizations.
1. Familiarity & Confidence (Reduced Risk)
2. Clear Expectations (Value as Perceived from the Consumer)
3. T.O.M.A. (Being a part of the Consumers Decision Making Process)
Familiarity & Confidence (Reduced Risk)
As a start up or a 15 year old business, creating and maintaining a brand is critical to business success. Consumers need to know who we are in order to decide whether or not to inquire with us. Creating a brand that reflects our position in the marketplace and then reinforcing that message throughout our community is key to becoming familiar with consumers and reducing the perceived risk to buy from us.
We may be running a retail shop downtown, and we may position ourselves as a boutique, service oriented retailer with exclusive brand suppliers to the area. If no one knows that, how will they know to visit us. If they see us once or twice, they may not want to risk the time and energy to see us when it comes time to make a purchase. But, if over time they see us, hear about us, and ask about us, then they might visit us. The kicker here is to ensure that when they do visit us, their experience matches their expectations.
Clear Expectations (Value as Perceived from the Consumer)
As we design our brand to reflect our position in the marketplace, we must keep in mind that it must be consistent with the experience people will have with our business. Our brand is used in all of our communication to the marketplace, and that communication must create clear expectations of what to expect from us when you deal with our business. The communication also needs to be customer focused, not product or service focused. Meaning we need to communicate value to our target market from their perspective. Using the retailer from above, we might state that one can come to us to find the brands that are typically found in Toronto or New York without having to go there, communicating convenience for our target market.
T.O.M.A. (Being a part of the Consumers Decision Making Process)
Top of Mind Awareness refers to what a consumer thinks of first for any given offering. For example, I say Toothpaste, you think... well whatever it was; that brand has your Top of Mind Awareness. Now everyone uses toothpaste, at least we all hope so, which makes this an extreme example, but the concept runs true. Think of a clothing retailer, what is the first name to mind? Understanding this, we must design a marketing plan to communicate to our target market so that over time, we begin to creep into the minds of our potential customers/clients. This gives us the opportunity to be a part of their decision making process when it comes time to buy. When someone needs what we have and they are weighing their options of where to get it, we need to be the first business they think of in order to capture as much market share as possible.
The Value of a Brand
A strong brand will lead to more sales and is the beginning to creating business success. Once your brand has been developed and maintained, you must ensure that you live and breathe the brand from every point that your customer/client connects with it, from your advertising, to your customer experience, to your follow up. Consistency will help you develop loyalty, and loyalty will bring you the business you dreamed of to begin with.
On the other hand, one may decide not to place any resources into designing and maintaining a brand. One may operate their business daily, focusing on the daily transactions and customer encounters with little to no energy focused on brand strategy or planning. This also creates a brand, a very weak brand.
This article explains 3 benefits to creating and maintaining a strong brand. It should be noted that these benefits pertain to local businesses just as much as they do for larger organizations.
1. Familiarity & Confidence (Reduced Risk)
2. Clear Expectations (Value as Perceived from the Consumer)
3. T.O.M.A. (Being a part of the Consumers Decision Making Process)
Familiarity & Confidence (Reduced Risk)
As a start up or a 15 year old business, creating and maintaining a brand is critical to business success. Consumers need to know who we are in order to decide whether or not to inquire with us. Creating a brand that reflects our position in the marketplace and then reinforcing that message throughout our community is key to becoming familiar with consumers and reducing the perceived risk to buy from us.
We may be running a retail shop downtown, and we may position ourselves as a boutique, service oriented retailer with exclusive brand suppliers to the area. If no one knows that, how will they know to visit us. If they see us once or twice, they may not want to risk the time and energy to see us when it comes time to make a purchase. But, if over time they see us, hear about us, and ask about us, then they might visit us. The kicker here is to ensure that when they do visit us, their experience matches their expectations.
Clear Expectations (Value as Perceived from the Consumer)
As we design our brand to reflect our position in the marketplace, we must keep in mind that it must be consistent with the experience people will have with our business. Our brand is used in all of our communication to the marketplace, and that communication must create clear expectations of what to expect from us when you deal with our business. The communication also needs to be customer focused, not product or service focused. Meaning we need to communicate value to our target market from their perspective. Using the retailer from above, we might state that one can come to us to find the brands that are typically found in Toronto or New York without having to go there, communicating convenience for our target market.
T.O.M.A. (Being a part of the Consumers Decision Making Process)
Top of Mind Awareness refers to what a consumer thinks of first for any given offering. For example, I say Toothpaste, you think... well whatever it was; that brand has your Top of Mind Awareness. Now everyone uses toothpaste, at least we all hope so, which makes this an extreme example, but the concept runs true. Think of a clothing retailer, what is the first name to mind? Understanding this, we must design a marketing plan to communicate to our target market so that over time, we begin to creep into the minds of our potential customers/clients. This gives us the opportunity to be a part of their decision making process when it comes time to buy. When someone needs what we have and they are weighing their options of where to get it, we need to be the first business they think of in order to capture as much market share as possible.
The Value of a Brand
A strong brand will lead to more sales and is the beginning to creating business success. Once your brand has been developed and maintained, you must ensure that you live and breathe the brand from every point that your customer/client connects with it, from your advertising, to your customer experience, to your follow up. Consistency will help you develop loyalty, and loyalty will bring you the business you dreamed of to begin with.
Tuesday, June 29, 2010
Do Your Ads Make You Money?
This is a very important question, and is usually difficult for business owners and marketing managers to answer. We can answer this question; it just takes a little discipline. There are 3 main factors to answering this question:
1) Knowing Your Acquisition Cost
2) Measuring the Leads Generated from a Campaign
3) Tracking Your Conversion Rate on Those Leads
Knowing Your Acquisition Cost
First, what is your average sale? Really think about the average. Out of 20 sales, what is the average? Next, what is your Average Gross Margin on a sale? What is left after Variable Costs on average? Now that we know our Average Gross Margin, we can determine how many sales we need to break even on a campaign. But wait, there is more… We also need to understand the lifetime value of your customers. So, on average, how many times does a customer buy from you? And, how many years do they come back for? Now you can begin to understand what a new customer is actually worth to you, which means we can understand how many new customers we need from a given campaign.
Measuring the Leads Generated from a Campaign
We touched on this subject last month. There are a variety of ways to measure the leads brought in from an advertisement. You can visit our blog at http://intriguemediacanada.blogspot.com/ if you want to read up on ways to do this.
Tracking Your Conversion Rate
Okay, let’s say that you are spending $2,000 on an ad campaign. Your Average Gross Margin is $200 and Customers, on average, buy from you once a year for 2 years. So, we know that you need 10 new customers to break even in your first year and receive a 100% return in the second year. Let’s pretend we want to break even in the first year. That means we need 10 new customers. If our advertising campaign brings us 20 leads, we know that we need a 50% conversion rate. If we track who comes in from the campaign and who buys, we will see our conversion rate. If it is lower than we need, we can work on improving it.
Understanding these three factors will bring you one step closer to answering the question, “Do Your Ads Make Your Money?”
1) Knowing Your Acquisition Cost
2) Measuring the Leads Generated from a Campaign
3) Tracking Your Conversion Rate on Those Leads
Knowing Your Acquisition Cost
First, what is your average sale? Really think about the average. Out of 20 sales, what is the average? Next, what is your Average Gross Margin on a sale? What is left after Variable Costs on average? Now that we know our Average Gross Margin, we can determine how many sales we need to break even on a campaign. But wait, there is more… We also need to understand the lifetime value of your customers. So, on average, how many times does a customer buy from you? And, how many years do they come back for? Now you can begin to understand what a new customer is actually worth to you, which means we can understand how many new customers we need from a given campaign.
Measuring the Leads Generated from a Campaign
We touched on this subject last month. There are a variety of ways to measure the leads brought in from an advertisement. You can visit our blog at http://intriguemediacanada.blogspot.com/ if you want to read up on ways to do this.
Tracking Your Conversion Rate
Okay, let’s say that you are spending $2,000 on an ad campaign. Your Average Gross Margin is $200 and Customers, on average, buy from you once a year for 2 years. So, we know that you need 10 new customers to break even in your first year and receive a 100% return in the second year. Let’s pretend we want to break even in the first year. That means we need 10 new customers. If our advertising campaign brings us 20 leads, we know that we need a 50% conversion rate. If we track who comes in from the campaign and who buys, we will see our conversion rate. If it is lower than we need, we can work on improving it.
Understanding these three factors will bring you one step closer to answering the question, “Do Your Ads Make Your Money?”
Friday, May 14, 2010
4 Simple Ways to Measure Your Ads
1) Use a Different Phone Number
This can be a very cost effective and straight forward method to evaluate your ads. All it takes is a phone call to your phone supplier and they will set you up with a new number that uses a separate ring tone when someone calls you.
The investment is usually around $12/month for a separate number on the same line. This way you can tell that anyone that calls that number is coming from your ad.
2) Use a Landing Page with a Unique URL
This can also be a very cost effective method for tracking your ads. By creating a separate landing page url for your ad, you can determine what type of response your ad is getting with consumers.
The key here is to have some sort of Website Traffic Analytics set up. We always recommend Google Analytics. It is free and easy to use. If you don’t know how to get that started, give us a call and we can help you.
3) Use a Survey or Questionnaire
This can be laboursome but can also offer the most insight into the effectiveness of your campaign as well as provide you with a chance to gather more information about your customers.
4) Use a Compelling, Unique Offer
This can work, but is not always the most effective. One thing is for sure, if anyone comes in asking for the offer, you know you are getting response. The key here is to test different offers over time and try to hone in the ones that bring the best response.
Once you have identified the top two offers, invest in a larger ad spend and drive traffic to your business.
This can be a very cost effective and straight forward method to evaluate your ads. All it takes is a phone call to your phone supplier and they will set you up with a new number that uses a separate ring tone when someone calls you.
The investment is usually around $12/month for a separate number on the same line. This way you can tell that anyone that calls that number is coming from your ad.
2) Use a Landing Page with a Unique URL
This can also be a very cost effective method for tracking your ads. By creating a separate landing page url for your ad, you can determine what type of response your ad is getting with consumers.
The key here is to have some sort of Website Traffic Analytics set up. We always recommend Google Analytics. It is free and easy to use. If you don’t know how to get that started, give us a call and we can help you.
3) Use a Survey or Questionnaire
This can be laboursome but can also offer the most insight into the effectiveness of your campaign as well as provide you with a chance to gather more information about your customers.
4) Use a Compelling, Unique Offer
This can work, but is not always the most effective. One thing is for sure, if anyone comes in asking for the offer, you know you are getting response. The key here is to test different offers over time and try to hone in the ones that bring the best response.
Once you have identified the top two offers, invest in a larger ad spend and drive traffic to your business.
Monday, March 1, 2010
3 Components to Writing an Ad
Target – Offer – Copy
The three components to writing an ad are written above in order of importance.
Target
The first part to creating any ad is making sure it is placed in front of a good target audience. No matter how good the offer and copy, if the ad isn’t in front of the right people, you will not get any response.
Offer
The next component that needs to be considered is the offer. You need to make sure that the offer is strong enough to make the targeted consumer take action. With an offer, you want to make it something that has a high perceived value, but doesn’t have a high cost to the business.
You can partner with a supplier to offer a product. A restaurant could partner with a local vineyard in order to promote a new local wine, and sell it at the restaurant for next to nothing. The ad could be "Come in for dinner during the week of March 10th through March 17th and receive a bottle of wine on us."You can also use a service as an offer. Delivery, installation, massages, evaluations, hair cuts and styles, etc. The idea here is to use something that has a low variable cost, but also a high perceived value.
Copy
The last component of any ad is the copy. You want to find the best way to communicate the benefits and why you are better than your competition with the copy written for your advertisement. The key is to have consumer oriented communication that follows the "WIIFM Rule" What's in it for me? Be sure to keep that in mind for your audience.
The three components to writing an ad are written above in order of importance.
Target
The first part to creating any ad is making sure it is placed in front of a good target audience. No matter how good the offer and copy, if the ad isn’t in front of the right people, you will not get any response.
Offer
The next component that needs to be considered is the offer. You need to make sure that the offer is strong enough to make the targeted consumer take action. With an offer, you want to make it something that has a high perceived value, but doesn’t have a high cost to the business.
You can partner with a supplier to offer a product. A restaurant could partner with a local vineyard in order to promote a new local wine, and sell it at the restaurant for next to nothing. The ad could be "Come in for dinner during the week of March 10th through March 17th and receive a bottle of wine on us."You can also use a service as an offer. Delivery, installation, massages, evaluations, hair cuts and styles, etc. The idea here is to use something that has a low variable cost, but also a high perceived value.
Copy
The last component of any ad is the copy. You want to find the best way to communicate the benefits and why you are better than your competition with the copy written for your advertisement. The key is to have consumer oriented communication that follows the "WIIFM Rule" What's in it for me? Be sure to keep that in mind for your audience.
Wednesday, February 3, 2010
Existing Demand vs. Latent Demand - Advertising in Guelph, Kitchener, & Waterloo
Making the distinction between existing demand and latent demand is very important when creating an advertisement. Existing demand is exactly that; people that already consume your product or service, whether it is from you or a competitor. Latent demand refers to consumers that have either decided not to spend their money on the product or service or do not understand why they need it.
From a marketing point of view, making this distinction is critical in ad creation. Speaking to someone who already consumes your type of offering means that we need them to come to you instead of someone else, or come back sooner than later. This means that the message needs to cater to that purpose. An offer or sale might work, a packaged offering might be an option, and other ideas can be explored.
If the ad is aimed towards latent demand, then we need to emphasize how your product or service will benefit the potential consumer. Showing people what life would be like with your product or service, and how it solves problems that they experience. The idea here is that we need to demonstrate why they need to spend money on your offering. Whereas existing demand does not need convincing, they need persuasion to come to you and not someone else.
Making the distinction between existing demand and latent demand is very important, so be sure to take it into consideration for all of your ad campaigns.
From a marketing point of view, making this distinction is critical in ad creation. Speaking to someone who already consumes your type of offering means that we need them to come to you instead of someone else, or come back sooner than later. This means that the message needs to cater to that purpose. An offer or sale might work, a packaged offering might be an option, and other ideas can be explored.
If the ad is aimed towards latent demand, then we need to emphasize how your product or service will benefit the potential consumer. Showing people what life would be like with your product or service, and how it solves problems that they experience. The idea here is that we need to demonstrate why they need to spend money on your offering. Whereas existing demand does not need convincing, they need persuasion to come to you and not someone else.
Making the distinction between existing demand and latent demand is very important, so be sure to take it into consideration for all of your ad campaigns.
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