The most fundamental premise of marketing, determining the audience to whom you wish to connect, is often not the initial focus of the marketing planning process. Before you roll up our sleeves and work to produce engaging content, who, exactly, are you trying to connect with? Who is your target audience?
Creative as you may be, and as talented with audio/visual and linguistic gymnastics as you are, this is the single question, above all others, that you need to determine at the outset of any project.
Start by Analyzing your High-Value Customers
Don’t make the process complicated. Start with profiling your high-value customers. Who are they and what do they have in common? Are they consumers or businesses? What characteristics define them? Does your product or service work better in a particular industry?
Spend Money on Research
Once you have determined what your high-value customers look like, start spending money on research to determine the size of the market and identifying prospects that fit the profile(s) you have developed of high-value customers. The cost of research pales in comparison to the amount of money you will spend on marketing.
Low Value or Negative Value Customers
The only thing worse than ineffective marketing is effective marketing spent on acquiring the cost to any business when marketing dollars are spent the wrong customer. The customer acquisition cost for companies is often substantial for companies. However, the hidden operational and other costs of low value or negative value customers can have a substantial impact on your profitability and the value of your business. According to Target Marketing Magazine, targeting the wrong customer can be “deadly on a number of fronts. It’s not just lost sales. [Bad campaigns] result in lost loyalty and a confused target market. They can quickly alienate some of a retailer’s most valuable potential and current customers. That leads to further difficulty attracting and maintaining relationships with the very people who could have been your best customers, brand ambassadors or social media amplifiers.”
Don’t be Afraid to Define Your Niche
Very profitable and successful companies have been built focused on a single target market. Don’t be afraid to spend your time and resources focused on a vertical that is filled with high-value customers. Your business becomes markedly simpler from a marketing and operational perspective in your customers fit into a very similar profile. It is much easier to service customers that have similar issues than it is to solve new problems because your customer needs vary dramatically.
“Build it, and they will come” is often a very high-risk strategy. Spend the money and time necessary for research to truly define your target market. It is dramatically easier and cheaper to tailor your message and use the appropriate marketing channels when you have identified who your high-value customers are.
About the author: Mr. Rory Brown is a Managing Partner of Nicklaus Brown & Co., the Chairman of Ad Genius, Goods & Services, Nearshore Technology Company, and a member of the board of directors of Desano. Mr. Brown received a Master of Business Administration from the University of Charleston, SC and is a Certified Public Accountant.