Today entrepreneurs have an incredible opportunity to create marketing that targets their best clients and customers. Because there is so much information available for today’s entrepreneur, it is critical that you decide who your message is for and how to reach them.
Segmenting your markets can help you build a more profitable business today.
Social media and big data can be overwhelming to entrepreneurs who are not only responsible for leading their business, but are still actively involved in business development activities for their organizations. Successful entrepreneurs are good at segmenting their business development activities.
You might be wondering why you should focus your message on smaller targets. I find emerging businesses can capture more market share by leveraging their ability to segment markets into smaller targeted niches. Segmenting effectively can help you grow faster than competitors.
Many older marketing strategies were about attracting a large number of potential clients to the organization then let sales spend their time qualifying the leads. Today, customers are involving sales people later and later in the sales cycle. If you hope to succeed, the client must know that you are not wasting their time on products and services that don’t meet their unique needs. Segmenting your markets helps you do this faster than any other way you could interact with your potential customers.
Clients want to know that you understand their world and what’s happening in it. You cannot do this if you’re always looking at only larger business trends. Segmenting your markets allows you to share your ideas with your best clients and customers at the right time. It can provide a bridge to ongoing relationships with key decision makers in your target markets.
Segmenting your markets allows you to target your most successful and profitable clients more easily and at a lower cost. If you learn to understand who your most profitable customers are, you can build a better business. Segmenting your customer base can also help you learn how much you earn on each client you acquire. Knowing who your better clients are is important to growing a more profitable business.
Segmenting your marketing allows you to be more precise with your value proposition. If you know certain trigger points get your potential customers to buy, you can invest more when the right events occur and spend less when they are less likely to buy.
Segmenting your client base allows you to better understand your clients’ motivation in buying certain products or services. For example, many clients put together their marketing plans during the fourth quarter of the year. If you sell marketing consulting, you might spent three quarters of the year nurturing client relationships and then invest significantly in the fourth quarter to get clients to raise their hand through more individual contact and special events.
Segmenting your clients and customers allows you to better understand what your clients are experiencing in their business at any given time. Are your best clients early adopters of new technologies? Understanding how your clients think about your product or service is critical to getting your best ROI on your business development efforts. When working with new technologies, I tend to have my client invest more to get marquee customers on board early so they can show a real ROI number when trying to convince other later adopting clients their products and services can bring them significant benefit.
Many businesses segment based on price and volume. They leave significant revenue on the table because they see little price elasticity in their products and services. My experience tells me about 10% of clients want the best product you make. Today, it’s easy to create marketing campaigns for your higher end customers without alienating your lower volume markets.
Segmenting your markets can provide you significant opportunities to analyze your market’s buying behavior to better understand what potential clients are looking for in future generations of your products.
Finally, segmenting your customers and markets allows you to see other trends and opportunities in your clients’ business. Many of these critical trends and opportunities would be missed when looking at the larger market. Seeing certain trends, you are able to make a better decision on where to invest your money in future opportunities. The one question I hear from all my clients is how to spot trends in their markets earlier. By understanding what drives trends in different markets it’s easier to spot future opportunities for clients to grow a more profitable business.
Next week, I share several ideas on how to get more done in less time. Many of you are always looking for ways to improve your ability to increase the amount you get done in less time. I have several ideas that will help. See you next week.