During our early days we targeted a select number of companies who we felt need assistance with marketing and were taken aback by a particular business owner’s attitude to marketing, although over the year we have realised he’s not alone.
I will maintain the anonymity of the business owner, referring to him only as Mr MD herein, but the dialogue we exchanged displayed why and where so many small businesses go wrong.
Mr MD: “I have spent tens of thousands of pounds on marketing and have seen very little return. As the owner of the company my pay has been reduced by the £200k I have invested in marketing over the 8 years”.
OM: “Let me try and understand why this may have happened. First of all who are your target markets/customers?”
Mr MD “We do not have any specific target markets – anyone who requires xxxxxxxxx is a potential customer and we have no customer trends or patterns within the business.”
Now, in defence of Mr MD, he had wasted a hell of a lot of money on what he considered ‘marketing’ over the years, but this turned out to be purely communications and promotional activity.
He had designed and built three websites over that period, developed corporate literature and had invested thousands of pounds in radio and newspaper advertising. However none of this activity was based on a sound strategy.
What became apparent very quickly was this business had no understanding of who its core target markets were and fell into the common “anyone, everyone, someone” trap.
He was trying to appeal to everyone and he was appealing to no-one.
The problem is that many businesses believe that by identifying core target markets they are narrowing their new client opportunity and potentially missing out on business that lies outside of these sectors.
This is nonsense.
They are not eliminating anyone from being a potential client, merely deciding to focus their attention on where the greatest opportunities lie.
If a company does not know who its target clients are it is impossible for them to…
- Know where to look for them
- Know what messages to communicate (i.e understand what drives them to purchase).
- Know the best time to communicate with them
- Know how best to service their requirements and maximise the revenue potential from them over their lifetime.
If a company has not got this information then how can it attract business effectively and efficiently? The simple answer is it can’t.
Every single business we have worked with has, after analysis, identified at least 2-3 clear target markets to focus its attention on. Each of these markets will usually have different purchasing drivers, transact with clients in different ways and have very different needs and wants.
What’s more, in 95% of the cases all of the answers, with regards to target markets, already lie within the business.
If you don’t consider yourself to have any target markets just take a look back at your last 2-3 years of sales data, categorise your customer and product base and identify the purchasing patterns.
It may be that you have one obvious target market, or you may have 3 or even 6. Also consider markets you are currently not prominent in but believe may hold massive opportunities due to the profile and nature of the businesses. Research these sectors and understand them.
Once you understand who your target markets are you can then consider how to communicate with them – the right message, the right channel and the right timing. Not only will this approach generate a much greater return on investment but it will also radically reduce your marketing spend by reducing the volume of misdirected communications.
The problem is that Mr MD had never really invested in marketing at all – he had merely been sold promotional activity by suppliers who were interested in “the sale” and not the client.
Not long after our initial dialogue with Mr MD their website had been redesigned yet again in a half hearted attempt to generate enquiries. Unfortunately, once again, this has been merely a case of cosmetic surgery.
If marketing is really a waste of money, is it just a mere coincidence that all of the world’s most successful companies are good at it?
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