At HandMade News, they recently took a look at how to successfully identify who your customers are and what the target market is shaped like. It’s obviously a very small market within your population, but how is a small business to find the market?
They start by identifying market segments:
Age: Are your customers young, middle-aged, or elderly?
Gender: Male or female?
Education: Have they graduated from high school? College?
Income: How much money do they have to spend? Are you targeting people with more or less disposable income?
Marital Status: Single, married, divorced, or widowed?
Ethnic and religious background
Family life cycle: Newly married, new baby, married for years, how old the children are
And then they go on to narrow it down further:
Lifestyle: trendy, conservative, pinching pennies, extravagant?
Social class: lower, middle, upper?
Opinion: open-minded or set in her ways?
Activities and interests: how does she spend her time? Reading? Watching TV? Riding her bike?
Attitudes and beliefs: is she interested in green products? Is she a community activist?
Figuring these things out can help you narrow down your target market and successfully find the right people to market your product to. If you’ve already done this, how have the demographics above changed with fewer customers spending less money these days?
At the Norman Transcript, they cite that 50% of new businesses fail within the first two years and 80% fail within the first five years. One of the key reasons for this is lack of market research before they enter the market. Companies are not taking the time to get to know the landscape of the market before the enter. Market size, creating a target market, studying the competition are all important factors that should be researched and written into a business plan at the very beginning of any business launch.
Telemarketing does not often return an interested customer, or someone who will purchase your product. However, it can still be a useful tool for collecting market research, as you can learn something about your current products, market approach, and target markets.
Here are eight ways Vendorseek.com suggests to use your calls as market research:
- Create different pitches for different telemarketing teams. Rather than guessing at the most effective pitch, a company can try different ideas and then concentrate on the most successful one.
- Assign different target markets to different telemarketing teams. While most brands aspire to go up-market, sometimes going down-market makes up in volume what it sacrifices in margin.
- Adjust the value proposition for different telemarketing teams. Using segmented telemarketing efforts is a good way to find out what difference it would make to adjust a price point here or credit terms there.
- Track reasons for rejection. From a sales standpoint, leads are gold and rejections are trash. However, from a bigger-picture market research standpoint, there is much to be learned from the reasons behind rejections.
- Find out who is getting the business. In the course of a telemarketing effort, a key thing to learn is who has what business. This can be valuable for competitive analysis and for targeting specific competitors in the future.
- Be sensitive to declining demand. Telemarketing callers could try to discern if rejections are based on choosing someone else, or simply on waning interest in the product or service.
- Watch out for substitution trends. Similar to the above point, be aware if there is a type of different product or service people are turning to as an alternative.
- Be alert for possible new offerings. Find out what people want, and it might help guide product development efforts.
A new article at Marketing Week takes a look at how companies are focusing their market efforts on women. Brands like Motorola, Nintendo, Apple and Ford are creating products specifically to appeal to this half of the market. Ford is releasing a pink Fiesta and Coors is releasing Blue Moon, after seeing success with Coors Light and Kasteel Cru, in the UK, a market where 12% of the female population drink beer.
Sure the title line seems very basic and straightforward, but it’s always good to have a refresher on why we do certain things. I came across this great post from Linda Morton in the Strategic Market Segmentation Blog in which she lists why market research is so important. She answers some of these questions in her post: Why Is Marketing Research Important Before You Create Your Product? Why Is Marketing Research Important To Your Competitiveness? Why Is Marketing Research Important To Determine Your Target Market? Why Is Marketing Research Important In Developing and Evaluating Marketing Campaigns? Take a couple of minutes to look over her post as I’m sure you will find it valuable.
Many businesses toggle between both qualitative target market research strategies, but which does your company prefer? This post on Strategic Market Segmentation outlines some of the advantages and disadvantages of using personas as opposed to target market research. The advantages listed are that personas allow the marketer to create a more visualized picture of the customer, since they use experiences and instinct instead of research to form the potential customer. Also, personas help provide marketers with an imaginary person that be used to represent the customer. Many marketers will argue that experiences are more valuable than research but the downside is that traditional research still remains more consistent, reliable, and verifiable. Personas can lead to failed marketing campaign since there is a chance of misinterpreting your imaginary person that is supposed to represent your customer. Which of these two methods, if not both, is your company using to help visualize your potential customers?