A lot of business owners feel that they have to market to the whole world – or at least their whole city/county/community. It scares them to consciously make a decision not to market to some segment (or segments) of their universe.
As small business owners, we don’t have huge marketing budgets. So, it really is important to figure out who our target customer is, so we don’t waste time and money on people who won’t buy from us. We have to be smart about where we allocate our resources. Think about a 25-year-old woman with 2 young kids compared to a 50-year-old guy. They are in different places in the real world and online. You really have to market to her differently than you market to him.
Even Wal-Mart, the world’s largest retailer, doesn’t market to the whole world. They are not marketing to the people who pull up in front of Nordstrom or Neiman-Marcus in a BMW 6-Series or Porsche 911. If that person shows up at Wal-Mart and buys something, fine. But, they are not targeting him or her.
Small business owners will be more successful getting a larger slice of a smaller pie. Let me share a real life example:
I worked with a client in financial services. We determined that the sweet spot for her product line was families with annual incomes between $50,000 and $150,000. We ran some demographics and determined that this represented about 30% of the population of her geographic area. This meant that her previous marketing was wasted on 70% of those who saw it. We focused her marketing tactics and she became a top producer.
Here at The University of Georgia Small Business Development Center, we have access to a lot of good research tools. These include IBISWorld, ESRI, and Reference USA – as well as others. We can use these to help you identify areas to invest your money and time
Who are your best customers? If you look at your sales data, you probably will find that some variation of the 80/20 rule applies. 20% of your customers account for 80% of your sales/profits. An easy example: airlines and their frequent flyer programs. They wouldn’t continue to do them if they didn’t work.
A final thought: this applies whether you sell to consumers or business customers. You are just looking at different attributes:
B2B – Business customers – size, location, amount of sales, number of employees
B2C – Retail customers – age, income, gender, lifestyle
Matt Pearce’s previous work experience includes financial management positions in the computer, freight/logistics and investment management industries. He also owned a business in northwest Georgia. He has worked in the Fortune 100, international business, and start-up operations. He brings an extensive background in the areas of financial planning and analysis, general management, business modeling, cash management, management reporting, taxes, sale & acquisition of businesses, and payroll & personnel management. With this broad background and perspective, he is able to help his clients determine the best course of action for their businesses or situations. Feel free to e-mail Matt with any questions you have, [email protected]