In today’s economy, it is more crucial than ever to make sure your marketing dollars are well spent.
Marketing and advertising are not intended to generate customers for your business. Say what?
Marketing and advertising can only do one thing, generate leads or prospects.
Your sales effort then converts those leads into customers.
Your excellent business process and friendly staff will keep those customers coming back and help to turn them into raving fans.
The better your targeting effort, the better your conversion rate.
By attracting prospects that value exactly what you have to offer and are looking to buy now, you will convert more prospects, increase the efficiency of your marketing, and improve your marketing ROI.
So, how do you go about finding your best prospects?
I start with the principle from this guy.
Who is this?
Here’s a hint, he was an Italian economist. He came up with a famous principle, made famous by Joseph M. Juran in 1941 at the start of the quality movement.
OK, he is Vilfredo Pareto who observed in 1906 that 80% of the land in Italy was owned by 20% of the population; he developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas.
So what does this have to do with finding your best prospects? Simple, roughly 20% of your clients or customers will generate 80% of your revenue and profits. How do you figure out who theses customers are? If you are using accounting software like QuickBooks, simply select the sales by customer report, select all in the date range and sort from biggest to smallest. Then export to Excel and sum the top 20% of customers. Pareto was incorrect in my case; my top 20% of clients only represent 78% of my business. My guess is that your top 20% will represent between 75% and 85% of your revenue and profits.
Once you have extracted your top 20%, now look for common traits. If you have a consumer business, what are their demographic and psychographic traits? If you have a business to business company, what is the average business size (employees and dollars) of your top customers? You may also want to know what type of business they are in. What are their most pressing needs? Where do they go for their information? How did you find them? There are many attributes that you can track depending on the business. The important thing is to figure out what these attributes are and how you can devise a marketing campaign to attract more customers just like your top customers.
In my next few blog articles, I will tackle how to develop your unique selling proposition and how to generate leads. In the meantime, download my free eBook, “The Business Growth Engine”! Click on the cover of the book below or fill in the order form to the right and start learning how to double your revenue and triple your profits.