Archive for Target market
Staying engaged with your Core Values
Posted by: | CommentsLast year, I was introduced and read a book by Steve Blank called, The Four Steps to the Epiphany
A quick overview of the book on Amazon states:
The essential "how to" book for anyone bringing a product to market, writing a business plan, marketing plan or sales plan. Step-by-step strategy of how to successfully organize sales, marketing and business development for a new product or company. The book offers insight into what makes some startups successful and leaves others selling off their furniture. Packed with concrete examples, the book will leave you with new skills to organize sales, marketing and your business for success.
This series of questions I have recently been using in discussing potential marketing opportunities with customers. It quickly determines how effective I can be marketing their product. If they have trouble answering these, there can be a huge disconnect between them and their customers/prospects.
- What problem are you solving for your customer?
- Does the customer know they have this problem?
- Are your customers actively trying to solve this problem?
- Do customers have a budget allocated to solve this problem or otherwise trying to spend money to solve it?
- Are your customers actively spending money, time or effort on solving this problem and failing?
These questions though derived for a startup sometimes are even hard to answer for a mature company. I would even encourage you to re-visit these questions as time goes on so that you don’t drift away from your core values or mission.
If you would like to learn more about Steve Blank, he is participating in the Start-up Lessons Learned Conference Friday, April 23, 2010 from 8:30 AM – 6:00 PM (PST)
San Francisco, CA. The goal for this event is to give practitioners and students of the lean startup methodology the opportunity to hear insights from leaders in embracing and deploying the core principles of the lean startup methodology. It is also being Simulcast across many locations.
Determining your Customer Perspective – Can you retain this customer?
Posted by: | CommentsThis is part 3 of a 3 part series on Determining your customer perspective.
Can you retain this customer?
Do you really look at this as a consideration when developing your marketing segments and the value you place on acquiring a certain type of customer? Most of us look at repeat and referral strategies across the board for every segment. Though, I would not disagree that we should have a strategy for each but consider the segment or that type of customer that you acquire that always seems to give you the benefit of the doubt or refer business to you. Should you not be biased in how you allocate your resources to that segment? Would it not be beneficial to offer certain incentives to that segment? Is this not the measure that most determines the profitability of the customer? My first question to most new clients: Do you have customers that refer you, and why? That is the strongest indicator on the health of the brand.
A great book on the subject is The Ultimate Question by Fred Reichheld. The Net Promoter website is a great place to start. To calculate your company’s Net Promoter Score (NPS), take the percentage of customers who are Promoters and subtract the percentage who are Detractors.
When John Jantsch author of Duct Tape Marketing, talks about the Marketing Hourglass, he says, “The top half indeed resembles the funnel concept, but the expanding bottom half, to my way of thinking, adds the necessary focus on the total customer experience that ultimately leads to referrals and marketing momentum.”
Just considering these statements above you can see why I feel so strongly that you need to consider throughout the entire marketing process your ability to maintain and build that customer into a repeat/referral customer. The initial sale should be nothing more than allow your best advocates to experience the entire brand! If you have segmented your marketing channels into: Who you want as a customer (part 1) and Who wants you? (Part 2), the next logical step is, Who will repeat and refer?
Losing customers is the clearest possible sign that customers see a reduced stream of value from the company. It is simply the strongest indicator that a brand is in trouble, even if you are replacing the lost customers with new customers. New customers typically cost more to acquire having to go through, the entire hourglass and older customers are working in the bottom half of the hourglass. Since that is true, repeat customers tend to produce greater cash flow and profits than newer ones. Referral customers are also more profitable because they typically enter the hourglass not at the top but at a much lower stage.
Ask yourself, does retention and referrals matter? Put numbers to it. How much does it cost to obtain new customers, to retain old customers? Consider, do the repeat/referral customers have different purchasing patterns? What makes a repeat customer attract other customers?
How would you go about in gaining a repeat customer? I believe customers evaluate you based on three areas: Value for the price, Quality, Service. If you provide metrics that are very responsive to these areas and continuously educate to receive input from your customer base, you will go a long way in retaining clients. However, these measurement metrics must not be at the expense of your customers time and resources.
You should consider ways of making them a part of your operations, service, sales and marketing processes. As an example, you may notice less frequent contact or payments extending. Look at these as signs to engage your customer. Building quality measurement systems into your process may be the most important ingredient in your marketing hourglass.
Related Posts:
Determining your Customer Perspective – Who do you want?
Determining your Customer Perspective – Can you satisfy these customer segments?
Determining your Customer Perspective – Who do you want?
Posted by: | CommentsThis is part 1 of a 3 part series on – Determining your customer perspective – Who Do You Want As a Customer?
I understand that starting with this statement may not be the best lead in this day and age, but you do have to start your process thinking here. Start-up or an existing business has to define their ideal customer. When you do, you understand your marketing challenges so much more clearly. So, who do you want as a customer? I would assume that you would like to have one that is economical to obtain, profitable once you have them and easy to retain. We need to start with a few specific characteristics but the overwhelming issue that you must address is how that interaction with the customer happens within your company, and if you can support it in a way that is acceptable to them.
How Many Customers Do You Need? Think of the throughput of your organization and the mix of customers that you can effectively support. Can you only a support a few large customers, or many small customers? If you would like a mix of both, consider your percentage, 80/20, 70/30? Think how this would change not only your marketing but your operational structure?
What are the characteristics of your marketplace? Do you understand the market size, the growth rate(shrinking or growing), the different segments and your competition? You also need to understand the economic value of customers in each category that you may segment them in. After you determine the characteristic, ask yourself: Can you economically compete in this arena? Cost to service certain markets can be considerable; it may be a good time for a SWOT analysis?
Decision Matrix template provided by Systems2win
What specific characteristics vary among customers that affect their profitability? We try to have an ideal customer but the bottom line is that all customers are different. Some of the specific characteristics that might be different are:
-
Volume
-
Sales support
-
Inventory required
-
Distribution support
-
Credit and collection costs
-
Speed of collection
-
Engineering support
-
Order entry support
-
Field service
Maybe the most important consideration is when you consider the items that your organization values the most, do your customers value them also? It is a hard road to go if you sell your organization on the values that identify your organization and then turn around and find a customer base that disregards them. So, who do you want as a customer?
Related Posts:
Have you taken the path of your customer?
Another word for Marketing – How about Voice of the Customer?
Have you struggled defining your Ideal Client – Find out how
Is your Value Stream Mapping backwards?
