You Need to Aim Before You Fire
by Andrew Shedden
It will probably come as no great surprise to you that if you want to hit your target you should spend a bit of time aiming. Targeting your market is just basic business 101. It is easy to do and everyone should do it. What might surprise is the large number of business owners we encounter in our consulting assignments that don't bother. It is usually very easy to pick them out in a crowd they are the ones wishing business was better.
When asked who they market to they will tell you, "Well, everyone is interested in Andrew's Widget Company. We've sold thousands of our high quality widgets since 1967. Our widgets do everything twice as fast at half the cost and are reputed to cure the common cold." Right…
The simple fact is that if you are generalizing your marketing you are minimizing your profits. When we started our company we had to determine what parts of the marketplace we wanted to service. We decided to focus on manufacturers and professionals as a way of giving our business focus. This way we can tailor our marketing, our products and services, and most importantly, our marketing message. Frankly, until we gained our focus we really weren't too busy.
The most effective way of getting your marketing message out to a group of interested buyers is to be sure to utilize highly targeted marketing. Because of the ever-increasing cost of media it is both inefficient and expensive to use a shotgun approach as a way of reaching potential customers. With the proliferation of directories, online Internet databases, and various trade publications, there is no need to waste your marketing and advertising money.
Retail marketers have almost an unlimited number of ways to target their markets. If ever you get the chance, go to your local library and ask if they have a current copy of the latest Standard Rates and Services Directory (SRDS) and take a look at your list options. If you want to reach software engineers who are also corporate vice-presidents, who drive BMW's, live in California and subscribe to Engineering Today magazine, well, you can.
One of the most common ways of targeting businesses is by their size. Most directories and online databases offer this as a basic selection. If the product or service you offer costs $1,000,000 it is pointless for you to be marketing to businesses that are selling $10,000 per year.
Another way of measuring business size is by the number of employees. If for example, your goal were to introduce high-speed photocopiers to law firms you would obviously do best to target firms that do a lot of copying. Perhaps you should target law firms with a minimum of 25 partners.
Bigger isn't always better. When targeting businesses by size you must make a realistic assessment of the likelihood of these larger businesses wanting to even spend their time talking to you. Although many large companies do like to outsource it still pays for them to do certain jobs in-house.
You can also choose to target businesses is by their geographical location. Depending on the scope of your business your market area may be local, regional, or provincial. Once again, there is not much sense sending out your latest promotional material to companies that you could never do business with even if they were interested in your offer.
You can all sold target new businesses by utilizing SIC Codes. Pick out your current best customers and look them up in a directory. Find out what their SIC codes are and then search for other companies with the same classification. The standard industry classification codes are meant to create a logical, and searchable, manner of classifying industries.
Here is an example of all of the above in action: Write down the names of your top ten customers. Look them up in a directory (InfoCanada, Scott's) and determine their size by sales, number of employees, the geographical area you wish to service, and their SIC codes. You now have your ideal customer.
The final step is to have a list compiled using these criteria. You can pay for the list to be compiled or you can buy a CD-ROM along with directories and compile the list yourself. Once the list is compiled you are ready to start smart marketing. One last thing to keep in mind is that it always is best to be a big fish in a small pond. Your results will be better by targeting 500 businesses and contacting all of them monthly rather than trying to market to 6,000 businesses by contacting them annually.
What does this all mean to you? If you want to expand into new markets effectively you need to do so in a coherent and logical manner. To some of you marketers this article may seem very basic. Well it is basic, as are all fundamentals. If you want to hit the target make sure you aim first.
