Remember Steve Martin’s, “Let’s Get Small”? That was a funny skit but it taught me a lot about marketing. The first time I saw it was in the early 70’s when I myself was in college taking marketing classes to supplement my core science courses. Little did I know that marketing, not science would become my primary field of study.
Think Small
Target marketing is the process of choosing smaller market segments at which to focus your efforts. It is the process of locating specific groups of prospects that share a common description and needs. Target marketing is a “vertical approach” to increasing your influence and market share. The brands with the most highly focused target audience are usually the most successful.
Rules in selecting a target audience
Choose one target audience first. Work on penetrating that audience for one year before moving on. You cannot be everything to everyone.
Choose your target audience based on their revenue needs and budget capabilities.
The tighter your focus, the more often you can provide them with relevant information, and the more that this information will be beneficial.
Choose your target audience based on you own interests.
Choose the type of people with which you like to do business.
Quality is far more important than quantity.
Be Picky
Experienced marketers know that if you reject the kind of business that you do not want, you will automatically become more attractive to those that are part of your vertical strategy. This also gives you the ability to become an expert in your business as it relates to THEIR business. Let’s face it, every business is competitive. Because of this, entrepreneurs might often find themselves chasing any business they can get. I talk about this at length in my “Attract More Business” program:
- Understanding the marketplace
- Benchmarking
- Competitive Intelligence
By fully understanding the competitive landscape and how our product, service, and company fits into it, we can find a specialized need in the marketplace that our product EXCLUSIVELY satisfies. For this reason, we should only accept business that matches the profile of the type of customer we want to deal with.
Examples:
- I know a financial consultant that works ONLY with teachers. Now that might sound ridiculous. Teachers, however, have very specialized financial needs. They exclusively qualify for special tax treatment and a larger share of their assets can be sheltered. Additionally, teachers typically have at least two sources of income: teaching and summer jobs or a side business. This requires specialized knowledge and advice. This person has become an EXPERT in the area of financial consulting for teachers.
- Even the IRS has entered into the world of specialization. They just announced their, “Market Segment Specialization Program” which focuses on developing highly trained examiners for each particular market segment. A market segment may be an industry such as construction or entertainment, a profession like attorneys or real estate agents or an issue like passive activity losses. An integral part of the approach used is the development and publication of Audit Techniques Guides. These Guides contain examination techniques, common and unique industry issues, business practices, industry terminology, and other information to assist examiners in performing examinations. Oh goody, just what we need tax cops with practical industry knowledge!
- Professionals such as doctors and lawyers have been specialists for years. Today you would be hard-pressed to find a doctor that claims to know how to treat all types of illnesses. In fact, I have become somewhat irritated in trying to get an answer on health issues from just one doctor. It seems today that even the specialists end up referring you to a specialist.
Research WorksDo some research to understand the vertical market that you select. There are some tremendous resources for this today:
- Vertical industry publications or trade magazines
- The Lifestyles Market Analyst
- FIND/SVP – Nexus/Lexus
- The Internet
- Hoover’s
An added bonus to this strategy is that in your research, you will likely come across many prospects that fit your profile.
Example:
In the early 90’s my consulting firm made the decision that we were going to specialize in specific areas. One of the first areas we selected was the cosmetic surgery field. We had a hunch that this would be a profitable area to focus and so we launched an exhaustive research effort to learn everything we could about cosmetic surgery. We purchased several research studies for just a few hundred dollars. I remember the agency we purchased them from told me that I was one of only 12 people that had purchased the 2600 page study. This gave us an inordinate amount of information about the history of the industry, where it was heading, the most popular forms of surgery, technological advancements, changes in the demographics and psychographics of patients electing surgery, practice management issues, insurance and managed care issues and the potential reduction in the associated costs that were predicted,.
Additionally, we interviewed 30 different physicians and learned about their perceptions. We even talked to the president of the American Medical Association and invited him on our Small Business Hour radio show. I want to stress, although they would have been great customers, we did NOT pitch ANY of these doctors. With all the information that we gained we were able to write several articles quoting all kinds of statistics about the future of various forms of cosmetic surgery. We were able to speak intelligently on every area of this field. We became MORE knowledgeable in marketing and managing a cosmetic surgery practice than any plastic surgeon. Because of months worth of research and a few hundred dollars, we were soon viewed as the EXPERTS in cosmetic surgery practice management and marketing. We were asked to attend an upcoming medical conference in Sacramento where I gave a speech on the future of cosmetic surgery. It was unbelievable. I was being treated like some expert and I couldn’t even spell liposuction 60 days prior. We gave seminars on practice management and marketing. We were asked to be editorial contributors to the industries trade publication. We were even asked to do a radio show by the massive pharmaceutical companies Pfizer and Merck, which we did for 18 months on CBS radio. All this happened well before the TV rage of “Extreme Makeover, “Nip Tuck,” and all of reality show follow-ups.
As you can imagine, we were able to easily attract some of the most successful, well financed, and well respected cosmetic surgery clients in the industry in just a few short months. In fact, they begged us to take them on as a client! Companies like Sword Medical Center, Cedars Sinai Hospital, Plastico, Boston Medical, and Cosmetic and Laser Surgery all came to us. No cold calls, no mailings, no fancy brochures. We were able to secure a strong position in the market as the leaders in cosmetic surgery consulting. Can you do the same? YES, YES and YES!
Think about your own business:
Who are the best clients for your business? Why?
What makes them good prospects?
What are some potential target markets that match with these profiles? Why?
Thinking small is the key to big success. The smaller, more tightly confined your marketplace is the better your chances are for success. Locate the smallest pond that you can find. Then figure out how to become the biggest fish in that pond.