Do you understand which prospects are likely to become good, profitable customers and which ones won’t? 

Do you know specifically why your customers choose to buy from you and know other prospects to approach who would probably buy from you for the same reasons?  (This is beyond the market requirements of quality, delivery, and price.)

Finding the answers to the important questions – like those above – is what strategic marketing is all about.

The benefits of identifying the target BEFORE pointing the gun:

• Higher profitability per customer
• Signing more customers from less sales calls / proposals
• Less time and money spent on activities that don’t work
• A greater ROI from the money you spend on your sales and marketing

(identifying the target = strategic marketing; pointing the gun = traditional sales and marketing efforts / tactical marketing)

Any type of marketing could improve your revenue – more exposure to more people gives you a better chance of reaching someone who needs your product / service (the shotgun approach) but to drive the highest profitability from your sales and marketing efforts you need to know the answers to the questions above so you know where to point your gun (e.g. your marketing & sales efforts).

Sales and marketing efforts are very important – don’t get me wrong – but if you’re going to spend thousands of dollars participating in a trade show why not do it where 50% of the attendees would have good reason to talk with you rather than 5% of the attendees?

Knowing who your target prospects are (by really understanding what you do well from your customers’ perspective) eliminates all the time and money you might have spent trying to impress those companies who are really not likely to buy from you.  Many times companies search for prospects in the same industry as current customers, and industry is one factor, but more times than not, the reasons your really good, profitable customers chose you is more subtle than that. . .

• Maybe it’s because of your expertise handling a particular material or process
• Maybe it’s because of the combination of services and/or products you offer
• Maybe it’s because you offer a supplemental service that others don’t (e.g. expertise in an area of importance to their business or inventory management or JIT delivery or special packaging or user training, etc.)
• Maybe it’s something that you’ve totally taken for granted but that your customers see value in

Taking the time and energy to understand and then use this information will increase your marketing (& sales) ROI, increase your profitability per customer, and you will have more customers who you really enjoy working with.

Contact Me if you’d like to have a free, no obligation conversation about your particular challenges and goals.

Has summer reenergized you for a strong wrap up to 2013?  Starting to think about what you want to accomplish in 2014?  Below are some articles and learning opportunities to help you reach your goals!                      

COLLEGE COURSES FOR FREE! 

As I was looking at material for this post I found Coursera – a website where you can take a wide range of college courses for Free!  Some that caught my attention:

Creativity, Innovation, and Change – offered by Penn State

Foundations of Business Strategy – offered by University of Virginia (I signed up for this one to see what they could add to my Aileron training!)

New Models of Business in Society – offered by University of Virginia

Inspiring Leadership through Emotional Intelligence – offered by Case Western Reserve University (another I’m interested in)

Many More!

ARTICLES

Culture Code:  Building a Company YOU Love (LinkedIn) – the SlideShare is worth your time!

6 Ways to Put the “Good” in Goodbye (LinkedIn) – How the way you treat employees who are leaving affects the culture of employees who are staying.

7 Things Really Persuasive People Do (Inc.)

Careful!  These 25 Quotes Might Inspire You (LinkedIn) – NOTE:  the quotes offered by the Commenters at the end are also a great read!

When you are looking to grow your business, use this chart to guide you through the easiest, most profitable route.

A business’ easiest sale is to sell current products or services to current customers (Box #1).  Think about all the different departments and functions within your customers’ organizations – are there still opportunities there that you could explore?  If so, use the good reputation you’ve built in the areas you already serve to help open doors to the opportunities in the new areas.

The second easiest sale is to sell a new product or service to a current customer (Box #2).  “Would you like to try our new sea salt potato fries with that?”  The fast food industry understands this really well.

The third easiest sale is to sell existing products/services to new customers.  Seek out prospects who look, act, and value the same things as the customers you serve today.  So why is this third choice?  Because it costs 5 to 7 times as much to acquire a new customer as to retain and develop an old one.

And the hardest sale is to try to sell new products to new customers.  Surprisingly though, this is the way many small businesses try to go when they’ve realized their business has stagnated or shrunk.  They go after a different type customer base, with new products / services, in a new geography.  I recommend leaving this to new entrepreneurs and for established businesses to take advantage of the value they’ve already created in the market by starting with the steps above.

Good Luck!

Wouldn’t you love to have a whole database full of customers like this?  Customers who generate good profitability, are nice to work with, who value what you provide for them, and who recommend you to their peers? 

Identifying the companies that would meet these criteria for your particular business is what it means to find your “target market”.  Most companies will not be in your target market but securing enough of those that are will ensure your ongoing success!

Targeting markets means consciously deciding on which doors you knock in order to get the greatest return for your sales and marketing investment.  It does not mean you turn away business that comes to your door – that’s a separate evaluation.

So how can you identify the markets your company should target?  As an established business, you can start by looking at the companies that have already chosen you.  Ask yourself:

1)    Which specific customers do we really enjoy serving and why?

• Customers that value your services tend to be more pleasant and less problematic because they truly get a benefit from the product or service you offer

2)    What customers stay with you no matter what? 

• Customers who continue to buy from you year after year, through price increases, through the “oops” that sometimes happen in business, or who leave for a competitor and then return, are getting a significant value from what you are providing – finding that value will help you find target markets that share that value and are willing to pay for it.

3)    Who are your most profitable customers?

• Note:  when you look at this figure, make sure you take into account all the time and effort you put into serving this customer – not just the direct costs of the product or service provided.  Special billing requirements, customer service hassles, complaints, slow collections, etc.  all drive down profitability.

4)    Which customers have referred other prospects to you?

• Those customers for whom you are the best match will be willing to provide you with a referral letter, act as a reference, or may have already referred another company to you.

To find your target market you need to figure out the “commonalities” of these “best” customers.  These will be a combination of demographic (e.g. geography, industry, what they purchase) and psychographic characteristics (e.g. the level of control the client is willing to give you, how they prefer to communicate, how often they want updates, the speed in which they want a response, etc.).

Once you’ve defined these target characteristics, you can grow your business by focusing your sales and marketing efforts on:

1)    Companies that share those same demographic and psychographic characteristics

2)    Markets, that you don’t currently serve, that would value the same benefits 

Focusing your sales and marketing efforts on these chosen market(s) will SIGNIFICANTLY INCREASE the return you receive from the time and money you invest! 

For assistance in getting started, please Contact Us.
]]> http://b2bmarketingconsultants.com/very-profitable-likely-to-recommend-you-great-to-work-with-your-target-markets/feed/ 0 http://b2bmarketingconsultants.com/part-2-who-would-recommend-you/ http://b2bmarketingconsultants.com/part-2-who-would-recommend-you/#comments Mon, 25 Mar 2013 14:57:33 +0000 http://b2bmarketingconsultants.com/?p=802

Last month we talked about what companies you would recommend and you can see the responses by scrolling to the end of this article. 

This month we’re going to talk about how you can use recommendations to help YOUR business.

As discussed in last month’s article, most people will at least consider the recommendations given by a respected person in their network or an industry peer who is willing to associate their name with a company. 

Do you have people who recommend YOUR company?  If you do, do you consider it a “bonus” or do you take an active role in the process? 

You can greatly increase your customer base and your profitability by taking an active part in the referral process. 

1. If you have people who have recommended your company, be sure to thank them right away!  Whether it turns into new business or not, they did you a great service by referring you to a potential prospect and gave you credibility by associating their name with yours. (Remember how hard it is to get new customers???  People who refer you do a huge chunk of that work for you!)
Cordrays
2. If someone has recommended you, start to take control of the process by asking them if they would be willing to write that recommendation in the form of a referral letter on their company letterhead for you to use in your sales motion. 
   • In written form, this gives you the ability to use their delight with your company in your sales efforts even with people and companies your referral doesn’t know.
   • When asking for a written referral, I always recommend drafting the referral for them.  Drafting it for them does several things:  1) makes it easier for your customer to complete it thus making it more likely that they will get it back to you in a timely manner and 2) helps you guide the information provided in the letter to the benefits and services that differentiate your company in the market.  Most customers will edit your draft to fit their personality and experience (and that is a very good thing!) but most leave the thought process you drafted in the final version.
3. Be proactive – ask your customers if they would be willing to recommend you.  If so, ask them if they’d
   • prefer to write a referral letter (help them draft it as described above)

   NOTE: You can use quotes from referral letters in other forms of marketing communications also e.g. on your website, in marketing brochures, etc. in addition to using the complete referral letter

   • write a LinkedIn recommendation (depending on your type of business)
   • act as a reference whose name and telephone number you can give to potential clients who are looking for further input
   • be willing to show your qualified prospect how your company has helped theirs by giving the prospect a tour or meeting with them in person
   • be willing to be interviewed for a YouTube video that you can place on your website and/or send out as a link to your prospect and customer databases
   • any combination of the above!

Recommendations can be incredibly helpful in the sales process.  You can say you’re the best company in the world for whatever product or service you provide but most prospects will dismiss the statement immediately.  Now, if your customers say you are the best and that they highly recommend you – that has a huge amount of credibility! 

Get started with your referral process today to start reaping the benefits as soon as possible! 

Recommendations I received based on last month’s newsletter:

1) Human Resources:

Pinnacle Employer Services

Bill Ratterman

(513) 578-6500

Bill Ratterman

bratterman@pinnaclehr.net

www.pinnaclehr.net

Bill Barkalow (of Aileron) recommended this company to us and since we’ve been engaged with them we wouldn’t use anyone else.

– Ken Elrich, Solid Blend Technologies

2) Estate Attorney:

Thomas P. Croskey, Attorney at Law

126 South Seventh Street

Miamisburg, OH 45342

(937) 866-2922

Tom did a great job helping me sort out my uncle’s estate and getting things in place for my aunt. I highly recommend him!

– Patricia Gilkeson, LexisNexis

 
]]> http://b2bmarketingconsultants.com/part-2-who-would-recommend-you/feed/ 0 http://b2bmarketingconsultants.com/please-reply-who-would-you-recommend/ http://b2bmarketingconsultants.com/please-reply-who-would-you-recommend/#comments Mon, 25 Feb 2013 19:37:45 +0000 http://b2bmarketingconsultants.com/?p=775

That’s right – I’m looking for YOUR input!  Then, in next month’s newsletter, I will publish everyone’s recommendations for the benefit of all. 

What companies / service professionals would / do you recommend? 

Is there a company that your company buys from and is extremely pleased with? 

Is there a company / service provider that you use in your personal life that you would recommend to others? 

Please take a minute and Send Me (Debbie@B2BMarketingConsultants.com) the company name, the Ohio city they are located in, and a couple of sentences telling us why you think they are great.  Next month I will publish everyone’s recommendations. 

In this age of too much information it’s hard to know what to believe out of all the sales and marketing material that is being delivered to us every day (and that’s coming from a marketing person!). 

Most people will at least consider the recommendation given by a respected person in their network or an industry peer who is willing to associate their name (& indirectly – their reputation) with a company – a company that they are proud to recommend because they know you will be pleased. 

Do you use referrals?  When you have a product or service to buy, do you ask your trusted peers, employees, and/or friends who they would suggest? 

According to the Harvard Business Review article “Why Customer Referrals Can Drive Stunning Profits” (June, 2011), “customers obtained through referrals are both more loyal and more valuable than other customers.”

If recommendations and referrals are so useful, what are you doing in your business to benefit from them?

Recently I’ve had the opportunity to work with a couple of growing companies who nonchalantly replied to my question of “how are you getting new customers now?” with “we get most of them through referrals.”  WOW!  That’s fantastic!  In that brief statement you’ve told me that you provide an excellent experience for your customers – so much so that they are willing to stake a portion of their reputation on you by recommending you to people in their network.  That’s something to celebrate with fireworks – not brush away like a grain of salt. 

So, if your customers are willing to recommend you (& I hope they are – if not, your first focus should be to look at quality and operational issues), how can you take more control of that process than to just be grateful when someone does recommend you?  In general, it’s by working to get those recommendations in forms that you can use as part of your outbound sales and marketing efforts e.g.:

• referral letters
• quotes you can use in your marketing communications &/or on your website
• videos of customer interviews
• individual recommendations on LinkedIn, etc. 

B2C companies have even more choices with Facebook and other social media sites. 

More information on how you can make customer recommendations work for your company, as well as a complete list of the recommendations you and your peers send in, will be in the March 26, 2013 edition of Strategic Marketing Tips.  Watch for it!

Knowing the value your company brings and which markets / industries / prospects will immediately understand that value, will allow you to target your sales and marketing efforts to those prospects who will be most likely to buy from you and who will fit best with your organization’s offerings, culture, and processes. 

Let’s put on our marketing hats and remember that we are talking about value from your customers’ and prospects’ perspective – not what you think you do great or what products you think are great but what they think you do or offer that is great. 

Value = what your product or service does that benefits the buyer’s company or the buyer himself*

ASK YOURSELF:

Does My Offering. . .

1. Increase My Customers’ Revenue?
2. Increase Their Profit?
3. Make the Buyer’s Job Easier?
4. Help Their Company, or the Buyer Himself, “Shine” When Evaluated by Their Key Constituents?”
5. Do More Than One of the Above?”

So many companies get wrapped up in what they do and how they do it (usually the offerings and the features of those offerings) that they forget to look at it from a prospect’s viewpoint – which in the scheme of things, is really the only perspective that matters.  If customers don’t see the value in your business and offerings, you won’t be a business for long. 

Have you taken the time and made the effort to really understand how your company looks from the outside looking in? 

If you really understand what value(s) your company brings to each prospect type, you’ll be able to secure even more paying customers and the sales process will be so much easier. 

How can you identify or verify the value you bring to your customers? 

1. ASK THEM!  The most critical element is to get the questions right– really think about what you want to know, write the questions, and then TEST them with someone you know well to make sure they interpret them the same way you do!
   • Create a customer survey (in-person, phone, or electronic) and send it out  (Note:  you will get better data if you separate the surveys by customer group – however it makes the most sense to group your different customer sets for your business)
   • Create an evaluation process to get feedback after they’ve interacted with your company (bought your service or product, used your business processes, attended a special event, etc.)
2. Do a competitive analysis – compare every customer touch point of your business offerings and processes with those of your competitors.

Even if you provide essentially the same offerings, the process you use to conduct business may be the value differentiator you are looking for – maybe it’s that you have customer reports, or your bill is easier to understand, or you are a local business, or your employees are better educated – it really could be anything. 

• Perform this analysis to the best of your abilities with your own resources and once you’ve come up with what you think are the differences – ASK YOUR CUSTOMERS to verify that you’ve gotten it right. 

When it comes to understanding the value you bring to market, your current customers really do know best!  

If you’d like personal assistance on your quest to really understand your value, please Contact Me to set up your free 1 hour consultation to discuss your specific situation and the best route to get you to what you need. 

If you’d like to explore further on your own, you may want to read through these previous newsletter articles:

Do Your Customers’ Opinions Matter?  How You Benefit from Customer Surveys!

Increase Profits by Targeting Markets

What is a “Target Market”?

Why B2B Customers Buy

Why Should Your Prospects Buy from YOU???      

*for B2B (business-to-business) transactions (B2C (business-to-consumer) transactions use different evaluation criteria)

When companies are first getting started they tend to accept just about any customer who is willing to pay them.  However, established companies need to be more strategic in their customer selection in order to maximize profitability as well as employee and owner morale.  

Is “selecting” your customers a novel concept for you? Were you under the impression that only customers had “selection” power?

When you’re beyond the immediate worries of entrepreneurial cash flow, you can start to focus on profitability, enjoying the work you do, and enjoying the customers you work with – luckily these three things happen together when you have the right customers. 

So who are your “right” customers?  You know them – they are the ones who are easy to work with, value what you do, tell others positive things about you, and seem to fit with your company. 

Who are the “wrong” customers?  You know them also – they are the ones that drain you, make you question why you are doing this, who always seem to have issues, and who fight you for every nickel and dime. 

Obviously the ones you may want to consider “firing” are the “wrong” customers but should you just go out today and tell them to go find another vendor?  Probably not. 

The strategic way to address this problem is to get more of the “right” customers on the books so you can afford to get rid of those that detract from your business.

Putting the extra effort in to get more of the “right” customers in order to give you some flexibility is definitely worth it in terms of both profitability (which will increase!) and the morale of both you and your employees.  Please see Increase Profits by Targeting Markets for more details on how to find your “right” customers. 

So do you have to “fire” a “wrong” customer in order to make things better?  Not necessarily.  Sometimes just recognizing that they are “wrong” and hurting your business gives you the perspective necessary to make them “right”. 

When you’ve decided that losing a particular customer might be what’s best for your business, it opens up options that you may not have previously considered.  For example you could:

1. Increase their price – if they were more profitable would that make them “right”?
2. Switch them to time and materials billing – maybe if they have to pay for each of their requests they will fix themselves
3. Discuss with them a redefined service package (based on your “new business model” – e.g. this one!) and allow them to make the choice to work with you on your terms or find another vendor who fits them better (service packages include all the ways you work with them – from the products/services you deliver to customer phone calls to special billing requests to payment terms)
4. Just say “thanks but no thanks” – if you are just totally fed up with them and don’t want to deal with them anymore

Sound like something that would significantly benefit your business?  The faster you get started, the sooner you get to the increased profitability and morale you want.  For more information / help, please:

1. Review the Target Market Articles offered by B2B Marketing Consultants
2. Check out the Know Your Customer Workshop offered by Aileron
3. Call me to schedule your Free Consultation to discuss what may work best for your company and your specific situation
4. Do any combination of the above! 

Everyone knows that you have to keep in contact with your customers and prospects.  You want to be seen as the “expert” and be “top of mind” when they need your product or service.  But how do you do that without becoming irritating to them?  By providing information they can use! 

Information can be provided in many forms and on many different time schedules – what’s important is to find the right combination that works for you and your customers. 

KEY POINTS TO REMEMBER:

Whatever form of contact you choose to use it must:

• Be of Interest to the Recipient (or it’s just SPAM)
• Be Timely
• Be Useful
• Include a little information about you and your company (see Reminder below)
• NOT be a sales promotion

Examples of ways you can connect with your customers through information:

1)  Forward your customers & prospects an article from a reputable source that would be useful for their business (not a sales pitch about yours)

• Time Commitment:  Small (find article & send)
• Frequency:  once a month to once a quarter

2)  Send them quick, useful tips that they can apply (you can write them from your experience or get them from another source)

• Your Time Commitment:  Small (find & send)
• Frequency:  weekly to monthly
• Examples (from Heard Management’s weekly Quick & Smart e-mail):

Procedures to Prevent Problems #81: Apples & Oranges
% tells more than $ when you’re managing your business

Procedures to Prevent Problems #90:

What are you selling?
This is not the same as “What are your products and services?”

People buy solutions to their problems and
satisfaction of their needs.

3)  Write a newsletter that provides relevant information, events, and contacts for your audience

• Your Time Commitment:  Medium  (choose, research, and write on topic(s))
• Frequency:  monthly to quarterly
• Example:  our monthly Strategic Marketing Tips newsletter

4)  Hold a seminar on a topic of interest to your prospects &/or customers with representatives from outside organizations as well as your own company (remember:  this is not a sales pitch – this is a reputation builder through the use of experts and information!)

• Your Time Commitment:  Large (choose topic; find experts, facilities, etc.; market seminar)
• Frequency:  quarterly to annually

5)  Write a whitepaper, get it published in a reputable industry resource, and send it to your prospects and customers.

• Your Time Commitment:  Large
• Frequency:  yearly or longer depending on your business

REMINDER:  make sure your contact information, company name, and a brief description of what your company does is on every communication!   Your brief description can range from a descriptive company tagline to a couple of sentences.  

Other suggestions?  If so, please comment below and I will include them in a future newsletter issue. 

See value in ongoing communications with your prospects and clients but writing is not your forte’?  B2B Marketing Consultants can help you find your “reputation building information” and do the writing for you.  Please Contact Us today!