Market Segments

Let’s start with defining market segmentation.

First, your “market” consists of the people who need your product or service and the people who want your product or service and are most likely to purchase it from your company. Rare is the company that has products or services needed by “everyone.” Manufacturers of toilet paper are one exception that comes to mind, but when you think about it, infants and children still in diapers are not “customers” in the sense they can make a purchase, and they don’t need toilet paper yet but that’s okay.

Second, market “segmentation” is a method for dividing up your potential consumer base into various, well-identified portions for the purpose of appealing directly to that group. An obvious differentiation is between female and male consumers. If your company manufactures and sells high-heeled shoes, women are going to be your strongest market segment.

Considering that group of consumers, it is likely you can further define your market into age-related segments. Things constantly change, but high heels are less likely to be worn by females under the age of 15 and those 65 and older. There are exceptions, of course, but what this tells you when it comes to marketing is that you are likely to have fairly well-defined market segments: Women in the age groups of 15 to 24, 25 to 34, 35 to 44, 45 to 54, and 55 to 64 or similar delineations.

Rather than belabor the example, let’s get to the point. The more narrow you can define your market segments, the more concentrated your sales efforts can be on each of those segments, and the greater your likelihood of success in expanding your market share in certain segments.

As professional business and marketing consultants, defining a customer’s market segments is one of the primary steps in developing an effective marketing strategy to build a company’s brand. Advertising can be expensive, especially if the return on that investment is questionable or, shamefully, unknown. Why would you market high heels to a male audience? Or in a Super Bowl commercial? Think about what makes sense.

Where the challenge lies is in determining the buying characteristics, or what we refer to as customer buying motivation (CBM), of each market segment. Why would women in the 25 to 34-year old age group buy high heels more frequently than those in the 55 to 64-year old segment? If you find it is job-related or as a need for social status, you have narrowed the potential appeal for your shoes to that age group.

The next step, and where professional help can prove valuable, is determining which delivery vehicle is best for conveying your sales pitch to that demographic audience. In conducting research, you might discover (as we have) that women 25 to 34 may have a favorite TV program but they use the Digital Video Recorder (DVR) to fast forward through the commercials. The challenge, therefore, is figuring out how to reach them with a message that encourages or convinces them to buy from you and become loyal to your brand.

We’re here if you need help with any of this.

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The Relevance Check

Every so often, business owners need to stop and check on their relevance in the world. It is far too easy to become complacent and consumed with our daily activities while ignoring our pertinence to the world around us. We think, like Mighty Mouse, that we can save the day because we’ve been there before or we know the answers … without even listening to the problem or trying to ascertain what it might be.

Business owners can have a tremendous impact in many areas of our human existence. You’ve surely heard the story of the shoe company owner who donates a pair of shoes to poor children for every pair his company sells. That has relevance, especially to the indigent young people who’ve never had shoes to wear, and we’re sure it makes the employees feel good about their ability to make an impact on the planet and people’s lives.

How many business owners sacrificed profits to keep employees working during the difficult economic times over the past several years? Quite a few, and that had relevance to the workers who were able to benefit from that generosity and keep their families fed.

The guide to relevance is through soul searching. Profits are certainly important; a business cannot survive without profitability. However, it is when profits become the sole motivator for business operations that the concept of greed enters the picture. It’s the gypsy mentality about taking money from other people however you can so you can enjoy a more lavish lifestyle.

Consider how relevant you are to your employees. Do they respect what you’re doing and follow your vision with a strong sense of belief? Or do they just show up and do their job, or the least that’s expected of them? Do they even know what’s expected? Even though you may have the best products on the market, your employees are the real asset to your company.

Think about your customers and how relevant you are to them. Do they need you, your products, and your services? Do they value what you offer, or are you just a commodity they need? Do they believe you treat them well? Could they purchase what you offer from someone else?

These are simple steps you can take to assess your relevance, and companies like Brand Irons offer assistance to help think these things through and assess where you are. One of the more important steps in the evaluation process, and often the hardest to face, is the self-evaluation. Are you doing what you truly want to do? Does it make an impact on the world? Are you happy going to work every day, or is it drudgery? Do you have time for your family, and do they appreciate the time you spend with them?

How relevant are you?

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5 Trade Show Tips

Spring is often the time for trade shows and business expos. If your business participates in trade shows, it’s important that they are successful, so here are five suggestions:

Tip #1: Define the desired success from your company’s participation in the trade show. Do you want x number of qualified leads for your sales team? Do you want to build brand awareness within your industry? Do you want to sell x number of units?

Tip #2: Be realistic. Having goals for participation is essential, but keep in mind that there are variables beyond your control. If publicity for the event is lacking, attendance may be less than expected. A popular keynote speaker may draw attention away from booth time. A concept some exhibitors use is to set an objective, then cut it in half and be happy with half of that.

Tip #3: Be prepared. Understand the event and anticipated attendance. Do you need 40,000 brochures if the event organizers tout that there will be that many people coming through the doors? Only if you want to waste a few thousand brochures. Know set-up and take down time frames. Will you promote your appearance at the show ahead of time? To what audience? Have you thought through how you’re going to follow-up with any leads you may get? Are you going to have items to give away? Who will be staffing the booth? What does your display look like, and does it need to be updated? Planning for the little things prevents them from becoming big things during the show, like Internet access or power for your computers. Have you booked travel and lodging for your staff?

Tip #4: Respect the event. How will your company look if a sales rep who’s staffing your booth is constantly checking E-mail or sending texts to someone while she’s in the booth? Or he’s eating popcorn while potential customers are walking by? There are proven methods for success in staffing a trade show booth, so it’s wise to review those with staff prior to the event so they understand what’s expected.

We have found one of the most successful methods for staffing an exhibit is having a customer in the booth, either with your sales personnel or by themselves. Think about it. Does a prospective customer eyeing your booth want to talk to a pushy sales person? Or would they prefer to discuss your products and/or services with someone they recognize who happens to be one of your customers? Contact Brand Irons if you have questions on how to make this work for your company.

Tip #5: Follow Up! This may be shocking to some, but statistics from various surveys indicate that roughly 75% of leads generated at a trade show are NEVER followed up on! Following up on leads is an essential part of the planning process. Be prepared to dish out the leads to sales reps and monitor their progress. Keep in mind that the people who stopped by the booth are expecting some kind of response, and represent potential sales.

Do the math: If you’ve spent $5,000 to exhibit your company at a show and receive 250 somewhat qualified leads, that represents 250 potential customers for your products and services at whatever price point you use. Let’s say it’s $1,000 in business for every new customer. That’s potential revenue of $250,000! If your company only follows up on 25% of those leads (62.5), you’ve reduce the revenue potential down to $62,500. Something to think about.

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What’s Your Value Proposition?

What good are you?

That’s a fair question for any business if it’s coming from a consumer. Tied to that question is: What makes you different or better than any other company that does what you do or offers the products and/or services that you do? That is a rather common query from today’s consumer.

What makes you different?

Consumers have a lot of choices when it comes to virtually any product or service on the market. They can shop online, weigh the variables, and make their decisions based on whatever information they can find, good or bad.

This is why your value proposition is essential.

Some marketing gurus call it your unique selling proposition (USP), and that’s close, but it really boils down to knowing your specific target audience (market segment) and the value your product and/or service provides to that specific target market. That’s a value proposition.

Let’s look at this from the perspective of a company that manufactures ceramic coffee cups. The range of consumers for their product could include companies that retail sets of dishes to consumers, companies that produce promotional gift items for businesses, tourism and hospitality-related businesses, and the general consumer.

Is the same value proposition valid for each of these market segments? Hardly.

When we dig deeper, we discover that the value provided by our ceramic coffee cup manufacturer to the promotional market may be an average quality cup at an economical price point. Add a short turn-around on delivery to the promotional company or the ability to print or etch the consumer’s message on the cups and turn them around quickly, and the value to the promotional company rises considerably. Add a variety of colors or different sizes and shapes and the value goes up even more.

The concept of a value proposition goes to the heart of your business. What consumer markets do you, or do you want to, serve? It is vital to know your consumer segments because the value they expect is what your company must deliver in order to meet or exceed their demands.

Weigh what you offer in terms of value, not benefits. That means you have to look at what you offer from the consumer’s point of view. You think of what you offer as a benefit to the consumer, where they need to see it as having value for them. Define the value clearly; again, from the consumer’s viewpoint. Determine how best to deliver that value message to the marketplace to earn your share of the business that’s out there.

If you need help figuring this all out, Brand Irons is here to do that, and the initial consultation is offered free of charge.

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Read This Now!

If you don’t read this entire article now that you’ve started, you will miss valuable information about how to get someone’s attention. Yes! That’s the purpose of the headline and this blog – getting people’s attention. And yes, we’re revisiting the topic.

Headlines are attention getting devices (AGDs) in print ads or newspaper and magazine articles. So is an opening scene or theme in a TV commercial or video and the initial sounds in a radio spot, TV commercial, and video. With the average person being bombarded by more than 2,000 advertising messages every day, it is imperative that any advertising you do for your business stands out from all the rest.

You also have to realize that the more targeted your ad messages are to your desired audience, the greater your chances of inspiring a positive purchase decision.

Some commercials are so horrible they stand out because they’re atrocious. Others are fabulous in that they grab a consumer’s attention and keep it until the end. If the commercial has the intended impact, it creates a sense of urgency with the consumer to go and make a purchase. That’s the intent of an AGD and the commercial, is it not?

Think about a majority of the drug commercials on television today. They try to get your attention by highlighting an illness or symptom, using 10 seconds out of 30 to explain what their product can do to resolve the concern. Then, based on the federal regulations, they spend the remaining 20 seconds telling you the potential side effects. Do these spots keep your attention after they get it, if they get it?

Knowing your target market segment is critical to developing an effective advertising and marketing budget. You are likely to waste money if you advertise to potential consumers outside of your target demographic. That’s another blog, though, and often unavoidable since advertising channels (newspaper, magazines, radio, TV) have to lump people (potential buyers) together to get you to buy their space or time.

Let’s consider a relatively new commercial campaign for a fast food restaurant that has decided to launch a breakfast menu, Mexican style. The belief is that their target audience is consumers who like to eat breakfast at the dominant player in the fast food breakfast market. The attention getting device showcases men claiming to be Ronald McDonald who love breakfast at Taco Bell. We asked consumers who were discussing the commercial which fast food company paid for the ads. In shades of Wendy’s “Where’s the Beef?” faux pas, the majority were unable to identify that it was Taco Bell.

Think McDonald’s is going to complain about the commercials? Hardly! When you study the 30-second commercial, Taco Bell is mentioned once outside of the actors’ lines and the logo appears twice … but Ronald McDonald is mentioned over and over. One might think it’s a commercial for the golden arches.

In other words, be careful about your attention getting device. Take the time to think things through. We noticed Taco Bell now has some different commercials focused more on their breakfast entrees than on their competition. Agencies don’t always have the right answers, and mistakes can be costly. Know your market segment!

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Product Presentation

One of the most important elements in marketing your business is how you present your company and your products and/or services. Presentation sets up the perception customers and potential customers have of what it is you have to offer. Poor presentation can develop a negative perception, and we all know a negative impression – especially if it’s the first impression – can be difficult to overcome.Presentation involves virtually every aspect of your business, from your web presence to packaging of your product, and from your corporate logo to your advertising impressions. There are psychological reasons to pay attention to presentation.

The example pictured pertains to positioning of your product. Most consumers are right-handed. While that may seem insignificant, it does play a role in product placement.

Store shelves are arranged to take advantage of human nature.

Store shelves are arranged to take advantage of human nature.On a grocery store shelf, dish washing detergents are displayed with the most prominent brand at eye level, front and center. The unwary consumer sees the top brand, notices the price, naturally grabs for a bottle, and continues on their trek through the store. It is only when they get to check-out that they realize they’ve grabbed the store brand instead of the brand they thought they had intended to purchase. Simple psychology applied to primarily right-handed people.

Look more closely and you realize the bottles are shaped and sized very much alike, and just as colorful so the perception is they’re all the same. At check-out, the consumer is less likely to return the store brand in exchange for a higher-priced product so the store’s psychological ploy has worked.

Have you taken a look at your company’s website lately? Does it present well to potential customers? When you take the time to think through the process of a potential customer finding your business on the Internet, you understand that it usually starts with a search engine query. If your website or other information fails to come up on the first page of search results, you only have a 25% chance of a user going further to find you.

If your website does land on the first page, it’s likely you’ve paid to promote your website, found the right key words to bring you to the forefront, and have a relevant page descriptor and relevant content that matches what the consumer was searching for. Those are the first steps.

Your website must then pertain to what the potential consumer is trying to find, and quickly. It should be easy to scan and locate the information they need to use your services or purchase your product. How all that information is presented is also critical. Make it easy for people to find what they’re looking for, and if you’re not sure what they’re looking for, ask them so you can enhance the presentation of your products and services.

You must get their attention, keep it, and get them to respond favorably to your call to action.

Presentation goes so much deeper:

Hand your product to a potential consumer with the label facing them.
Give someone your business card with the information easy to read.
Park vehicles with your company’s logo in conspicuous locations to maximize the advertising value, and make sure the vehicle is clean and attractive-looking.
Keep the entrance to your building neat and clean.

Remember, it’s hard to change a first impression. How do your employees present themselves and your company?

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Starting With The End In Mind

In many aspects of business today, it is good advice to plan with the end in mind. That also applies to starting your business, and why a professional feasibility study can identify if the end you have in mind is realistic … and viable.

A basic example: Let’s say you have an idea for a product that fills a niche currently under-served or non-existent in the consumer world. Your goal is to start the business, establish the product in the market, grow sales volume, and eventually sell the business off to a major company at a $500 million dollar or higher price point.

Seems like a great idea until you’ve invested thousands of your own money, borrowed as much as you can, and guaranteed thousands more, only to discover that some other company beat you to market, sold “your” invention to the corporation you were thinking might buy yours, and already has the lion’s share of the consumer market locked up.

You’re forced to find alternative markets, retool a different product (if you can), changing your “end result” objective, or filing for bankruptcy. You may have wasted your life’s savings and possibly those of other family members as well.

A feasibility study can provide you with the research and the perspective, along with the financial data to avoid such disasters. When you engage a professional firm such as Brand Irons to conduct a feasibility study, it is important to share your end result up front.

Knowing that your objective is to serve a need is critical to establishing a viable business model. However, knowing what you want as the end result is the element that provides you with the driving motivation to build your business.

One of the most vital, and often discouraging, revelations identified in a feasibility study is the learning that the business concept has only a marginal commercial viability. This is discouraging because it often crushes the dream of someone’s idea. It is also vital in that it dissects and reveals the inherent flaws in the concept.

An example: A client wanted to create and build an elite level indoor skateboard park in a large city’s suburbs. The rent for the space requirements, the cost to build the custom-designed facility, and the operational expenses were all upper end. What the feasibility study revealed was the inherent flaw: Skateboarding enthusiasts prefer to be outdoors when they can and they don’t like to spend money to skate!

More on this later, but consider a feasibility study for your business idea. Whether it’s for starting up a new venture or expanding an existing one, take the time to think things through. If it’s a good, viable idea today, it should still be feasible in a month or two.

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The Little Things

Imagine driving a luxury car that gets outstanding gas mileage, handles like a hot knife through soft butter, has the speed of a cheetah, and looks like a museum tribute to automobiles. You admire it parked in your garage, love how it drives, but then realize it’s uncomfortable to sit behind the wheel. The seat somehow feels awkward and whatever you do, you are unable to adjust it to be comfortable. Do you keep the vehicle, or trade it in for a ride that’s more comfortable?

Little things can make a big difference when it comes to vehicles. In business, little things can also make a big difference when taking care of your customers.

You may have the best product on the market. Your management, production, and sales could be the smartest, fastest, and highest caliber teams on the planet. Yet a simple thing like how your company is perceived on a social media website could be devastating to your bottom line. Some might say your social media presence is far from a “little” thing and we might agree … but in the grand scheme of a product’s life cycle … it could be argued that it is relatively minor if a comment quickly fades, but a deeper crisis or impression that persists can wreak havoc.

Consider the example of a large, globally recognized company that offers a variety of products and, in most circles, is highly respected and trusted by consumers. Mix in the company’s choice to make itself virtually impossible to contact for problem resolution and where does the consumer’s trust level go? To the bottom! Is it a little thing? Other corporate giants might feel the strategy is a stroke of genius, minimizing consumer contact and reducing staffing requirements. With a consumer-centered mindset, however, that little thing looms large in the long-term success equation for the company.

Little things matter. Minor details can be crucial to the success of a business and its products or services. Is setting a table with a dirty spoon all that bad in a restaurant operation? Yes! A health inspection could close the restaurant. A consumer might overlook the “little” thing, but they’ll surely ask for a replacement, inspect that replacement piece of silverware closely, and be suspicious the next time they visit that establishment, if they ever come back.

From your perspective as the business owner, how much extra time does it take to make sure the silverware is clean, in light of the impact it may have on your long-term survival? There’s a familiar saying: If you don’t have time to do it right, when will you have time to do it over?

Another real life example: We checked a candy bar’s expiration date on a recent visit to a convenience store and found it was a month beyond its “Sell By” date. Checking the entire box, we found the same date throughout. Even though we did purchase a different candy bar, we took one of the expired items to the check-out counter and pointed out the expiration date to the clerk. While the clerk was grateful, she was also astonished and admitted that the candy vendor had just been in the store!

It’s the little things. Was the vendor negligent, or simply trying to move expired product to unsuspecting consumers? How much would that unsuspecting, yet trusting, consumer have had to pay if he’d broken a tooth eating a hardened, out-of-date candy bar? Potential for a lawsuit?

Think about your business and your products and/or services. What are the little things you overlook that may be huge in your customer’s eyes? Take care of them by making them “big” things. When it comes to marketing, everything matters!

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Back to the Beginning

There are times when it is wise for you, as a business owner, to take a few minutes, hours, or perhaps days to stop and re-visit the reason you got into your business. As we plow through the months and years, it is easy to forget why we do what we are doing. A consultant can help if you need assistance to come up with strategies.

Here are some questions to consider in reflecting on your business:

Are you happy? You should be excited about getting up and going to work every day. My bad. You shouldn’t even think of it as “work” if you enjoy what you’re doing. If you like/love what you do, that attitude infects the rest of your team … and your customers. If you are on the other side of the happiness coin, that also is conveyed to your employees, your customers, and your prospective customers. You obviously want to be on the happy side.

Are you fulfilled? Your business should be challenging and rewarding. Your responsibilities should push you to the edge of your comfort zone, and maybe over that edge if you learn and gain confidence in your ability to solve the problems or manage the crises. Walking in the same rut day after day can be mentally challenging and emotionally draining. You want to finish your day feeling you’ve accomplished great things.

Have you made an impact? Each of us wants to make a difference in the world, whether through our business, our volunteer work, or in the lives of others. Take a few minutes and think about the impact your business has on your customers? Is it able to fulfill their needs, wants, and desires effectively? Has your company served them at the level they expect to be served? Are your employees satisfied with what they do and feel fulfilled, as though they are also making an impact?

These are three questions to reflect on, whether you stop and do it once a month, every six months, or once a year. The impact this time has on your business can be measured in profits, and comes down to what you do about any low areas you may discover. If your business experiences peaks and valleys, it’s logical to fill in the valleys.

There’s only person who can change your attitude about going to work and managing your business. Likewise, there’s only one person who can decide whether you will be happy or sad as you go through your day. Leave work at work when you go home and enjoy the time with your family. Let your loved ones know you love them, in words, a hug, a kiss.

If you think about what you do for a living and it fulfills you, you’ve answered the second question. If not, think about what you can change that will make it fulfilling. If it becomes more fulfilling for you, it will do the same for your employees and your customers. If in doubt, ask your customers what would make what you offer be more satisfying for them. Then figure out how you can provide that to them.

By and large, if you have the answers to the first two questions, the answers to the third will fall in place. Take some time to think about it.

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Have You Reached The Top?

How do you know if your business has reached the pinnacle? Is it when you own the niche for your product or service and the accompanying majority share of the market? Is it when consumers come back and sing your praises throughout the land?

A lot depends on how you define the top. When a mountain climber reaches the top, there’s only one way to go, down. A business, on the other hand, can reach the top and remain there for quite some time. You might even compare it to the children’s game, King of the Hill. The stronger and smarter you are, the longer you stay on top but you can always be knocked off by a surprise move.

When you define what the peak is for your business, you may discover you have already reached it. If, for instance, the acme is achieving five million in sales for your product or service, your financials may show you’re already there. What was the goal in your original business plan? Have you looked at that lately? What do you do if you’ve achieved the goal you originally established?

The obvious answer would be to diversify and find another mountain to climb, or to re-define the peak you seek to achieve. If you achieved five million, can you do 15 or 20?

From a marketing perspective, the journey to the top involves taking the right steps, having a support system behind (and with) you along the way, and bringing others with you. There’s a story somewhere about the person who wants to climb the mountain and struggles to do so, but when she helps others reach the peak turns around and realizes that in the process of helping another get to the top, she has done so herself.

Back to marketing, though. When you do the right things and achieve the objectives you set out to reach, your continued success – the ability to remain at the top – depends on building brand loyalty. If your customers love being on top, #1, with you and you foster that admiration with them and your prospective customers, your place on top of the mountain can remain strong for a long time.

Last week’s blog referred to Ford and Chevrolet. Both remain strong on the automobile mountain because they have taken care of their customers, but also because they have not been afraid to take risks and innovate with new designs and different vehicles. They’ve made mistakes along the way, no doubt. Ford with the Edsel debacle and Chevrolet with the recent government assistance program.

The lessons to be learned are that if you remain focused on your customers and what they want, you can weather set-backs and still reach the pinnacle. Mountain climbers have challenges along their path to the peak; it’s not a flight of steps up to the heights.

If you are King of the Hill, enjoy it while you’re there!

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