If you've been in business a while, it can be easy to assume that you know who your customers are. But unless you're growing so fast that you can't keep up with customer demand, reviewing your marketing strategy is probably a good idea. And that can start by reacquainting yourself with targeted marketing basics.
Without a targeted marketing effort, your business can plateau, sink or just not reach its full potential. Plus, you could be wasting a lot of money if you're currently using a scattershot approach to connecting with potential customers. New data sources and analytical tools can help you target your marketing efforts more effectively.
The first step is to analyze your existing customer base closely. That requires collecting as much demographic information from them as possible. You may be surprised by what you'll learn. It's possible that your customer base has slowly shifted over the years, but you're still reaching out to the kinds of people who, for whatever reasons, have become a smaller proportion of your customer (and prospect) base.
If you cater to people who live in proximity to your business, the reason for a shift in your customer base could be as simple as a turnover in neighborhood demographics. Such a shift could also account for a slow loss of business because you've failed to modify your product or service or reposition it to connect better with the new demographic.
Examples of straightforward demographic variables that you can gather for your customer analysis include:
"Psychographic" customer characteristics are another segmentation category, incorporating people's thoughts, perceptions and beliefs that influence their purchasing patterns. Data on those key attributes are available from specialized market research companies.
Next comes a review of the purchasing patterns of different demographic groups in your existing customer base. Who are your best and least significant customers? Monitor purchasing patterns over time, including which segments are growing and shrinking.
Also evaluate demographic trends in the broader market. That will tell you whether any shifts you're seeing in your customer base are consistent with broader demographic trends. The answer has important implications for your marketing strategy.
For example, if you're operating in a demographic island that's bucking trends in the wider market, you'll probably want to shift your marketing focus as the trends catch up with your locale. Plus, if you're looking to grow your business, you may need to expand your marketing efforts to a broader audience than your current dominant customer base. Expanding your customer base may require a different approach than you're using to reach your existing customer segment.
One way to build a strategy for appealing to new customers is to group similar people into "clusters" to more effectively market products or services to them. Cluster analysis is helpful when basic demographic criteria might not be strong indicators of whether an individual is likely to be interested in the product or service you are offering.
Once you identify customer (or prospective customer) segments that you want your marketing efforts to reach, figure out how to best connect with them. Personalize your market segmentation strategy to each cluster's preferred mode of communication. This is sometimes referred to as "emotional intelligence when communicating with their customers."
Finally, keep in mind that you also need to supplement your demographic research with competitive analysis. If competitors are miles ahead of you in reaching a new demographic that you intend to target, you'll need to factor that into your strategy. Indeed, you might decide not to try to expand into that segment if the effort would require a huge investment with uncertain prospects for success.
Nobody said building a successful marketing campaign would be simple or inexpensive. Your CPA can help you review your financials to determine whether an investment in a targeted marketing campaign makes sense for your business.
Get in touch today and find out how we can help you meet your objectives.