The biggest failure of most marketing programs is they are reactive. The high growth company does it very differently. Here is how. TOM McKASKILL
By Tom McKaskill
You need to do more than wait for them to take the bait. Refine your customer-to-product fit – it will save you money and boost your growth.
Your conversion rate of closing sales from prospects is one of the strongest indicators of marketing and sales success.
Every lead generated will cost you something, whether it is cost per direct mail piece, a telesales call or an advertisement. You need to measure the cost of getting the lead and then the cost of converting it to a sale.
Too often, companies spend too much getting in front of people who have no interest in buying instead of working out how to get in front of the prospects who have the highest need for the product or service. The more you can define your target customers and direct your marketing and sale effort to concentrate in that area, the higher your conversion rate will be and the more productive your marketing and sales spend.
The biggest failure of most marketing programs is that they stimulate interest by being reactive. That is, they put information out there but wait until the prospect notices it and contacts the supplier.
The high growth company does it very differently. They have a very well defined target customer and use highly directed marketing programs to pro-actively get in front of the customer with the problem or need they can solve. They typically work off prospect name and address lists so that they can be very targeted with their marketing spend. They go after 100 prospects and close 50 rather than 1000 prospects and close 10.
This marketing strategy is often referred to as the “identified and reachable customer”. That is, my ideal situation is to have a list of names and addresses of my target prospects and have a means of getting to them directly to put my proposition.
Thus selling to members of a profession, CEOs of listed companies, school headmasters, accredited members of a trade or residents in a selected apartment tower are all highly specific programs. However, you need to find a match between your product or service solution and your target customer. Sometimes you will end up changing one or both in order to improve your positioning.
Where you have an existing product or service, go back to basics and ask yourself which customer group has the highest need for it. Now take the time to focus on better methods of getting directly to that group alone. Do they have a special place they shop, meet or specific journals they read? Are they members of an association, club or business program? Who else sells to them that has better access to them than you? Can you partner with the other provider to gain access?
If you can better define your target customer and improve your “fit”, you can also often increase your price and decrease your marketing spend.
High growth companies devote additional resources to their target customers to increase account penetration and referral sales. They typically spend much less on marketing as a result compared to low growth companies.
However, referral selling does not work across many different products into many different customer types. The prospect needs to look the same and have the same need in order to respond positively to a referral. Thus, having a well focused target customer definition helps increase referral selling which in turn decreases lead times.
Have a go at refining your product/customer fit. You will be surprised at how much this improves your focus and ultimately your growth.