Target Your Market: Top 10%
What are the best ways to select and target your top market niches, buyers and prospects in order to help you reach your dividend objective and profit goal. The key to finding your top 100 customers or top 10% of customers will be in your analysis of your sales information and data. First, you need to get lists of what you have sold to each customer. For each customer, make a list of what they bought, when they bought and who they are. Pull as much information as you have available in any systems you use. It will be well worth the effort to get the data into a report format so you can look at these customers in more detail.
Your ‘Top Ten Percent’ or ‘Top 100’ customers are at the top of your ranking for volume, frequency, and profits per dollar invested. Group your customers by profits generated for your company, organizing them by ‘Top Ten Percent’, those ‘Above Average’, and customers with ‘Below Average’ profit earnings. Utilize statistical information and remember customers purchase multiple products, so do not use products as the only measure of profitability. Try to develop a full picture of each customer’s contribution and expense to your organization, consider overhead costs as well as other expenses on a per customer basis. It is important to align your profitability measures with your corporate goals and always use measurable information – don’t just guess!
Once you have arranged your customers by their profitability to your organization and have grouped them in the three groups mentioned above – you will get the most out of this strategy by determine the specific demographic differences between categories. Each customer tier will have specific demographic, preferences, and product expectations unique to that group. This analysis helps you better understand the differences between your customers, which enables you to serve their needs. It may be necessary to append your historical sales information with customer demographics from third party data in order to get a clearer picture of who your customers are in each category. If the differences are not apparent, then revisit this segmentation process and refine your profit measures.
Now that you have a good understanding of who your top customers are, do you know where you can find more of them? Your next step will be to explore potential locations, internet activities or places where your “ideal buyer” goes. It’s also important to identify locations or places where you can contact these potential top customers in mass – meaning that there are a lot of them in one place. The reason for this emphasis is to make your marketing activities as productive as possible. If you spend money to send an offer to a location where you know there are only a few of your top potential customers, that will be less effective than spending that same amount of money to market where there are lots of your ideal customers.
With a good understanding of who your top customers are and what they buy from you, you should have a pretty good idea of what’s important to these buyers and more buyers like them. And with all the work you have done on your killer offers you should be able to tie those efforts in to building special offers that have appeal to your top customers. What messages, call for action or guarantee will your best customers find most appealing?
These are your top customer prospects and you must create a consistent, persistent way to reach them. If these groups and targets are your top customer prospects, more than likely they are also the top prospects for your competition. In order to gain new customers from these groups you have to have systems and methods for reaching them on a regular basis. Many of your best buyers will be familiar with contacts and the marketing messages you and your competitors send. It’s very important to have your offer well-defined, your messages and appeal on target, and your call to action in place. As part of your system and method, you will also want to keep your staff and employees informed. When they come in contact with one of your top buyers, they should be prepared to treat them well.
There is another approach that you can use to get more new customers that look like your top 10% or top 100 customers. If you target “Centers of Influence” or COI for these groups you and your business can reach top customer groups in a cost-effective way. To develop a strong program to target COIs, you need to know more detail about who your customers are. For example, let’s say you own a cafe. What would you do if every Thursday at about noon the same group of business people come to your location and meet for lunch? How much do you know about this group and what groups or companies they represent? And, how can you approach them to get more information about their Center of Influence?
Part of the answer depends on how much you know about your top customers. With geographic information like postal code, home address, demographics like age, gender, family size, likes and dislikes or associations they belong to you can begin to pinpoint centers of influence that you can use to attract new customers. For example, if you own a pizza restaurant and you find out that your Top 100 Customers are all between the ages of 14-21, they all live with a 20 kilometre radius of the local school, and their top purchases occur between the hours of 2 pm and 5 pm on weekdays, you have a lot of information be begin locating individual COIs to reach new customers. In this case, you could approach a school administrator, sports team coach or other after-school facility to find a contact that you can use in your business.
How would you approach that person and offer them something of value? One thought would be to offer them a free sample in exchange for a video or other testimonial that you can use in your marketing. Contacting coaches or other local sports organizations to sponsor teams can also be a very effective tool with COIs. (Note: this is also a good application of where a joint venture might be useful to your business.) Or, you might offer them the use of your location and facility free of charge for one or two afternoons per week. You can also sweeten the offer and increase the value of your offer by including “extras” like free drinks, free appetizers/snacks or other products the group will find valuable. The point is to leverage the contacts with individuals and your top customers that have centers of influence you can use. And, like all the other approaches and tools we have presented here, you need to be prepared to follow up with COIs in a systematic way on a consistent, regular basis.