Market selection is one of the most underrated activities that is critical to the success of any business.
2 weeks ago, I had an interesting conversation with an industrious young lady who contacted me for some business advice as she was about to launch her new ‘natural’ soap venture.
The conversation went something along the lines of the following:
Julie: I’ve created a range of natural soaps that smell amazing and contain a number of essential oils that are great for the skin.
Me: Well done. So who are you going to sell these soaps to?
Julie: Everyone with skin. This product can benefit anyone who uses it.
Me: OK so there are 65 million people who have skin in the UK. How are you going to get your message in front of all of them?
Julie: Hmmm, I didn’t think about that.
Me: OK so let’s try and narrow this down a bit. When you created your product did you think about the person who is most likely to use your soap?
Julie: Yes, women over 40 years old.
Me: That’s better, but it’s still a large group of people. Let’s say this represents 1 million people in the UK. Do you have the marketing budget to put your message in front of 1 Million people?
Me: OK so let’s narrow this down some more. Is your product going to be more or less expensive that other soaps in the marketplace?
Julie: Approx double the price because of the quality of ingredients that I have used in the product.
Me: So, would I be correct in assuming that you would like to put this product in front of people who can easily afford to purchase your product?
Julie: Yes, that makes sense.
Me: OK, let’s dig deeper. How much would this woman over 40 earn on an annual basis?
Julie: Good question. Well, I would assume that they would be earning over £70k a year because that’s way above the average income in the UK.
Me: Great. So your ideal customer is a woman who is over 40 who earns over £70k a year. How else can we narrow this down?
Julie: I’m stuck, give me some ideas.
Me: Well, if your ideal customer has a habit of purchasing products in the price range that you are selling your products for, it’s highly likely that she won’t be scared-off when you present your prices to her.
Julie: Good point but how can I target people who have a proven history of purchasing these products.
Me: You could get access to a mailing list of ‘buyers’ people who have bought similar products. Do some research, speak to a few list brokers and comeback to me with an approximate market-size based on the criteria that you have mentioned before.
A few days pass and Julie calls me.
Julie: I’ve spoken to a few list brokers and I have identified a few mailing lists that have a universe of approximately 60,000 people who meet this criteria.
Me: That’s great. I hope you can see that you have a list size that is now reachable. If you put your message in front of 5000 of these prospects on a monthly basis, you will be able to cover this market in 1 year.
Julie: Yes that’s much easier that trying to approach 65 million. Ha.
Me: Exactly. I hope this has helped.
Julie: Yes, I really appreciate your help.
A number of you who are reading this will realise that there is nothing special about the advice that I have given Julie.
You would be amazed at the number of people who don’t drill down deep enough when they are trying to reach a market of prospective customers.
So, try to remember…
The more focused you are on targeting a prospective customer who has a distinct set of characteristics/attributes, the easier it is going to be to create marketing campaigns than result in, the most important aspect of business..
Let’s discuss a number of factors that you MUST understand about your market before you embark upon creating any form of marketing campaign.
FACTOR 1 – MARKET SIZE
The first thing that you need to do is to visualise your ideal customer and create a customer avatar for this person.
An example of an avatar could be:
- A woman
- Age 45-60
- Education level:: Graduate
- Current Income: $100k-$120k
- Political leaning; Liberal
- …and anything else that you think makes this prospect ‘ideal’
Once you have determined what your ideal customer looks like, the next question you need to ask yourself is…
How many people like Julie are there out there in the marketplace?
What behaviours have they demonstrated that indicate that they are likely to be responsive to my marketing/sales messages?
You need to find a balance here.
If you read my post about niches you would have heard me say that…
She who markets to everyone, ends up marketing to no one.
If you don’t have endless amounts of cash stashed away in your marketing budget, you will NOT be able to afford to get your message out there to everyone, so drill-down as deep as possible to identify a market that is easily reachable.
FACTOR 2 – ACCESS
Once you have defined your ideal customer and you have a rough idea about how many of them there are in the marketplace, you are going to need to work out how to reach them.
In other words, how you are going to get your message in front of them.
A number of questions might help you to determine this, some of which might include:
- Which magazines do they read frequently
- Which blogs/websites do they spend time on consuming information frequently
- Which Gurus currently engage with these people and where does this interaction normally take place
- What is the most affordable way to reach these people – email, online ads, print ads etc
I would always advise that you start of with the most affordable method of reaching these prospects and only after you have created campaigns that convert these prospects into paying customers, should you then scale-upwards and start spending more money to reach them using other media.
FACTOR 3 – RESPONSIVENESS
I love this expression…
History leaves clues!
What I’m saying here is that if your prospective customer has bought other similar products over the last 30, 60, 90 days, there is a chance that they will also buy from you in the not-too-distant future.
Because they have demonstrated that they have actively gone into the marketplace to solve a problem.
Your job will be 100x easier trying to sell to people who have demonstrated this buying behaviour because they are ”buyers” by nature.
A number of additional questions that you can ask yourself about your marketplace that will help you to tap into thia responsiveness factor might include:
- Who are your competitors and what makes then unique – you can reverse engineer their marketing and sales processes, and apply them to your business to increase your sales conversions
- Who sells a product that compliments but doesn’t compete with your product – you could reach out to these business owners and suggest that you run a joint campaign
See where I’m coming from?
OK, next up….
FACTOR 4 – UNDERSTAND PAIN IN THE DOMAIN
What you need to do here is to have a clear understanding about the pain-points that your prospective customers are facing.
If you can work out how your competitors aren’t able to adequately address this pain-point you can tailor your service in a way that gives your business a competitive advantage.
PAIN is a greater motivator than GAIN.
People are 2x more likely to take action to overcome pain than to get a desired benefit.
You should also try to get a clear understanding of the goals, aspirations and dreams of your prospects so that you can also appeal to these desires as well.
Once you have got a clear idea of the pain and the gain conversations that are going on in your prospect’s heads, you should tailor your USP, marketing messages and service offering to speak directly to your prospect in terms of pain and gain.
There are hundreds of ways that you can gather this information but you could easily start by surveying these people using a tool like Survey Monkey.
FACTOR 5 – RAPPORT-based ENGINEERING
No idea why I came up with that as a factor but what I’m talking about here is that you must become a master of building affinity bridges with your prospects.
Here’s what I mean…
When two people have affinity, they have something in common.
And, they find it easier to…
Let’s say you’re a 50 year old woman who is a trained nurse.
If you reach out to a prospect who just happens to be another 50 year old woman AND a nurse.
You’ve got affinity!
So, when you are defining your ideal customer, ask yourself what you have in common with them that you can talk about in your marketing messages that will help them to come to the conclusion at a conscious and subconscious level that..
This person is just like me!
The more rapport you have with your prospects, the more you will sell.
Food for thought.
If you think about your marketplace and the prospects that you are trying to reach in terms of the factors listed above, I’m quietly confident that you will find it 100x easier to have more meaningful conversations/dialog with your prospects which may very well improve your sale conversions.