Leads, prospects, customers. Where would you be without them? In big trouble. That’s why the mantras – “Sell, sell, sell”, “Show me the money,” “Go big or go home” are so popular in business. They’ve become the war cry of many a Sales and Marketing Director, often just after the board meeting when their targets have been increased to hit next year’s growth plan. But what we’ve discovered is that one thing that’s often lacking is precision. Too much time is spent finding customers, and too little time is spent finding the perfect customer. This can have serious implications for business owners and their growth plans.
When looking at strategy we’ve learnt that nearly 80% of all business from start up to over £30M are not marketing to their perfect customer with pinpoint precision? There are potentially several reasons for this. Here are some common marketing myths.
- If I become more focused on targeting a smaller group of perfect prospects, my growth potential reduces.
- If we broadcast out wide and loud surely more prospects will hear us and come into our funnel.
- If we specialise in serving a narrow service offering, we’ll appeal to less people.
But by focusing on your perfect customer with precision, you’ll be more effective, waste less resources and recoup greater rewards. You will not only understand them better than a much broader audience, you’ll also be able to build products and services that are perfect for them.
By learning more about your perfect customer, you’ll know how best to reach them, and market to them in a way that removes wastage and guess-work. You’ll be different from the competition, you’ll be the expert with an opportunity to monopolise your niche.
Our only word of warning is to make sure your niche exists and has enough value to be worthwhile. You don’t want to be fishing in a pond with no fish. And if you find this pool is now overfished, how do you stay on a growth track? Look at what changes need to made to attract new customers with new or revised products or services. To scale up you’ll need to keep evolving.
So what happens if you don’t target your perfect customer with precision?
Your marketing spend will increase, which in turn will increase the cost of customer acquisition.
Your sales team will be less efficient and worse still you may win customers you don’t really want.
Having the wrong customers can lead to some serious problems:
- Harder for operations to deliver consistently good results.
- Increased customers, but reduced profits as GP is affected and the cost of delivery is too high.
- High complaint levels which absorb operational expertise and increases costs.
- Higher customer churn.
- Late payment and/or debt.
- Reduced margins.
Your cash flow and working capital demands will increase, both will make reinvesting in growth and talent becomes harder. This, in turn, impacts growth and the future development of a high-performance organisation.
Talented people and teams become frustrated, demotivated and staff churn increases. This, in turn, makes it harder to recruit and the rot sets in.
The value of your business will decrease as you have negatively impacted your growth, working capital, LTV ratio, customer satisfaction scores and profits.
All of the above can put your business on the path to Death Valley. That’s why targeting customers is so important. It’s a case of quality, not quantity. Anyone can attract customers by slashing prices. The difficult task is to attract customers who love your product or services and are prepared to pay for it. The way to do that is to target them, with precision.
If you’d like to talk about any issues facing your business why not book a Discovery Call click here. The call is free and confidential.