Do you know who you are talking to? Are you saying the right things? Is your message getting across? When it comes to customers, no two are alike – or are they? To ensure you have the right answers to these critical questions, I’m going to challenge you over a four part series to really dig deep into your customer knowledge and analytics to see how well you really do know your customers and target prospects. Customer knowledge and expertise can make or break your marketing efforts and the return on your marketing investment. Good times or bad, it can also make or break your business. So stop multi-tasking and focus, take it in and begin the process of knowing where you stand and what your customers look like.
Do you know who you are talking to? For most businesses, especially small businesses, the answer usually comes as John Doe or Sally Smith or Larry at ABC Company with maybe a few additional highlights mixed in. While these may be accurate, they are far from complete. The key to efficient, effective marketing comes from saying the right things at the right time to the right people. To do that, you need know who those people are, what they care about, how they interact and engage with the product or service you deliver and what their needs are in relation to the product or service you sell. You should also know where they are in the lifecycle of their relationship with your business, what they look like as a consumer demographically or business firmographically, and what is the potential future revenue and profit they represent for your company. Having this information can help you understand both who you want as a customer and what customers might want to do business with you. You can get this detail through a process known as segmentation.
This blog series is going to discuss the components of behavioral segmentation - segmentation that helps you get into the head and hearts of your target (not simply just the physical characteristics). For part one, let’s briefly look at three core components of behavioral segmentation and see how they might affect your marketing activities.
First, let’s consider the attitudinal dynamics of your target. This defines the underlying needs of your customers and/or prospects and the attitude they have around the category of products and services you sell. For example, are they focused solely on price or are they more concerned with their cost of ownership over the lifespan of viable use? Taking from this first example, would you focus a marketing message only on price to someone who is really concerned with long term value and cost of ownership? I hope not. Not only would this impact your potential revenue, it could provide your customer with a product or service that doesn’t meet their needs, which could drive dissatisfaction and ultimately cost you future business.
Next let’s move to the behavioral dynamics of our target. This defines how customers transact with your company. Are they one-time buyers or frequent buyers? Do they buy often but in small amounts or are they infrequent buyers that buy a lot when they do buy? The buying behavior can help you determine the frequency of your message and what that message should be throughout cycle of customer engagement. For example, if someone buys only once a year, should you market to them once a week? Probably not. While continuous contact with customers is critical, the right frequency strategy behind that contact will help optimize your spend, secure mindshare and possibly loyalty. Continuing this example, if your customer only buys once a year and your strategy is to connect with them once a month, is your message always about the sale? Unless you are working to expand the portfolio of what they are buying with complementary products, it probably should not be. Why would you try to sell something if you know your customer is not buying? The opportunity here is to offer value added content that makes their experience better or to simply let them know you are there to serve them and you appreciate their business. Then, when buying time rolls around you shift your message on the offer and close the business.
Our third trait brings into consideration the lifecycle of your relationship with your customer. What is the customer’s history with the company? Are they a new or existing customer? Do they present an opportunity for additional growth or are they at-risk for loss to a competitor? This piece of the segmentation helps you do things like identify offers or programs that are relevant to the conversation. It doesn’t mean that your offer is always different, it could simply be the language you use or the program name you select. For example, a new customer could get 30 percent off their first purchase to get them in the door. Then, after they’ve done business with you for some time as a loyal customer they could get 10 percent off for meeting specific buying patterns or volume attainment, etc. In either case, your verbiage should reflect your understanding of the value of that customer as a new opportunity or a valued client.
As you think about these three initial traits of our segmentation discussion, truly consider how much of each of these you know across your customer base. If not your entire customer base, think about the consumers or businesses you consider to be your best customers. Do you know this information about them? If not, you have a great opportunity to hone your marketing skills. Think about it, if you could get more customers, who would you want them to look like, your best or your worst customers? This is what I mean when I question the statement that no two customers look alike. You want as many customers as you can that all fit into a tiny box you call your best customer base.
Our next discussion will cover the remaining three areas of segmentation.
Until next time,
Michael
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