Saturday, December 4, 2010

Home-Grown Marketing Research

One of the best ways to get to know your best customers better is by a little above-board sleuthing. Start by identifying them through sales records that will let you make a list of the people who represent 80% of your sales--it will probably be about 20% of your total number of customers.

Then compile your best customers’ street addresses from credit card records, phone numbers, delivery destinations, etc. Plot them on a map and look for clusters of them. Good marketers know that birds of a feather flock together; similar people tend to live in similar neighborhoods. Once you’ve figured out where your best customers live, you can look for other birds of that feather—they’re your best new prospects.

Now drive through those neighborhoods. Guesstimate the value of the homes and look at the cars there to get a rough idea of income. Check for kids and/or their bikes, swing sets, and sports equipment (or lack thereof) to get an idea of their parents’ ages. Don’t limit your surveillance to weekdays, either. Take a few minutes on the weekend to drive through to see how many residents are doing their own yard work or washing their own cars. These things will also tell you a lot about their lifestyle. The more you know about your best customers, the better marketing decisions you will make.

If you are a business-to-business marketer, your research job is actually a little easier. You probably have fewer (but bigger) transactions with fewer customers than someone who sells to the general public, which simplifies your data-gathering. What may complicate it, though, is the tendency for businesses to have multiple decision-makers in their buying processes. Don’t be daunted by the details, though—just gather data on one person at a time until you’ve got a clear picture of who they are and what their role is.

You may also think that personal information like education and lifestyle choices aren’t relevant to business buyers since their job is to make rational, profit-oriented purchases. Nothing could be further from the truth. Corporate buyers are people, too, and they allow plenty of emotion to influence their decisions. In fact, a personal, human reaction to a vendor’s marketing approach may be the only factor that separates two competitors. The more you know about that business-to-business customer as a person, the greater your chances of tipping their decisions in your favor.

So, before you make any decisions about price, or which products to sell, or what ads to run, take a good hard look at your customers as people. Identifying your best customer takes some work. The end result, though, is marketing that works better, costs less, and generates greater profits.

Dave Donelson, author of The Dynamic Manager's Guide To Marketing & Advertising: How To Grow Sales And Boost Your Profits a for and

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