Can you afford market research?
To quote Albert Szent-Gyorgyi; “Research is to see what everybody else has seen, and to think what nobody else has thought.”
I am often told that the costs involved with market research are too much for those holding the purse-strings within a company. While major corporations routinely budget hundreds of thousands of dollars for target market research, which includes focus groups, professional surveys, and direct mail questionnaires, there are effective (and cost-effective) techniques for smaller companies with more creativity than cash.
I find that a step-by-step market research plan can be designed to get you the most “bang” for your buck. As you work through the steps, don’t be obsessed by any one phase. Try to think of market research like you would check the mirrors while you’re driving. Obviously, you don’t study your side and rear view mirrors just once when you leave the driveway and call it done, no matter how hard you look that one time. Market research is an on-going process, and as you continually narrow your focus, you’ll refine your sales processes for better and better results.
Certainly, it’s very important to find the perfect fit for your company. Though you may have conducted some market research in the past, the fact that you’re still with us indicates that you haven’t zeroed in on the “perfect fit” market for your products and services. So, with that in mind, try to put aside any preconceived notions that might get in the way of a better answer as you research your ideal market.
Sales Growth Question: What are your basic levels of market research that you think will save you costs?
Sales Growth Lesson: To understand what customers want, you need to find out everything you can about them that is relevant.
To get an in-depth look at how you can do cost-effective market research get my target market ebook, Targeted Sales Focus, today!
© Copyright 2011, Danita Bye Sales Growth Specialists, All Rights Reserved.
The basics of market segmentation – Define your target market
“There is nothing like looking, if you want to find something. You certainly usually find something, if you look, but it is not always quite the something you were after.” - J.R.R. Tolkien
I think of a target market as a narrowly defined cluster of potential clients who are likely to provide the greatest ROI for my sales and marketing investments. Generally speaking, markets are segmented along three basic lines:
- Location – A geographic segment is, in part, what you’d think: a particular area, such as the Southeast, Georgia, or Atlanta. But geographic segments also include overlooked variables like climate and population density. What location conditions could require you to refine your sales focus?
- Client Profiles – Depending on your products and/or services, your ideal demographic might be composed of individuals or companies, but probably not both. If you sell to individual customers, you’ll need to segment those individuals according to factors like age, income, gender, and family status. B2B companies will need to consider company size, location, industry focuses, distribution channels, other variables. What customer profiles could require you to refine or expand your sales focus?
- Human Factors – In the case of individuals, psycho-graphic segmentation refers to sorting potential customers by subjective qualities, such as lifestyle, interests, opinions, and preferred activities. If you sell to businesses, you’ll need to precisely determine your ideal market’s mission, vision, leadership style, and emotional vs. rational decision makers. What lifestyle factors could require you to refine your sales focus?
On the surface, picking out a target market doesn’t seem so daunting. Don’t kid yourself, though – correct market research isn’t easy, and it isn’t quick. But it is an investment that will pay off handsomely.
Sales Growth Question: Did you do a research on the demographics of your community; and if you did under which market segments were they placed?
Sales Growth Lesson: You need to consider the types of industries available to you, their number of employees, annual sales volume, location, and company stability.
For a more in depth look at how to identify your target market make sure you check out my sales focus ebook, Targeted Sales Focus. If you have any additional questions feel free to give me a call at (612) 267-3320.
P.S. Be sure to take a look at my colleague’s article for insights into myth-busters around hiring sales people, “Is depending on salespeople a sure bet to hit sales targets?”
© Copyright 2011, Danita Bye Sales Growth Specialists, All Rights Reserved.
More myths that mislead sales efforts
Myth 4: Good Customers Will Follow Us Anywhere
Depending on the products or services you sell, physical distance may be more or less of a factor in your relationship to your customers. But it’s always a factor – time zones, shipping, and sheer convenience dictate that.
Myth 5: A Competitor’s Salesperson Can Give Us an “In” to his Market
Not necessarily – good customers are a by-product of good fits – the profitable mesh of your customers’ needs and your offerings. Change the fit, change the customer.
Myth 6: Our Sales Reps Pitch Customer-Centric Benefits
Are your salespeople selling your products and services with an eye toward WIIFT – What’s In It For Them? Don’t count on it, even if you’ve trained them to sit on the other side of the desk when they’re selling.
Myth 7: Low Margin Is Better than No Margin
This myth is about opportunity cost, the price you pay when you choose one activity over another. Many times, it’s better to forego a little profit now in favor of higher profits later.
Myth 8: Every Customer Is a Good Customer (a.k.a. The Customer Is Always Right)
If some markets are bad for your business – and some are – then some customers are bad for your bottom line, and for your sale force’s collective morale, and for your company’s reputation.
Myth 9: Slow Pay Is Okay
Every business has at least a few customers who are good for their bills but take just this side of forever to pay them. And really, what’s the harm in that? Actually, there’s plenty of harm in that. A slow paying customer is a variation of the high maintenance customer.
Myth 10: Bigger Accounts Are Better Accounts
This is a tough myth because some big accounts can put your business into another league. Then again, some can put you out of business. Ideally, every customer should be viewed as a potentially “good” customer.
Myth 11: I Can’t Afford Market Research
Yes, market research can be expensive. However you can’t afford to neglect your market research, either, because it’s the foundation of a truly targeted sales approach.
Sales Growth Question: What is the biggest motivator that gets your sales people going?
Sales Growth Lesson: Defuse the myths!
Want more information on how to accurately focus your sales efforts? Check out my sales focus ebook, Targeted Sales Focus, or e-mail me today.
© Copyright 2011, Danita Bye Sales Growth Specialists, All Rights Reserved.
Myths that mislead sales efforts – are you a victim?
When researching targeted sales focus as a potential marketing plan, it is important to separate myth from reality. I believe that you cannot fully understand a process, until you have actually done it yourself. As the great Aristotle said; “One must learn by doing the thing, for though you think you know it, you have no certainty until you try.”
I find from experience that people who have not practiced a method themselves are much more likely to believe the myths – however sketchy these may be. Be wary however! It’s funny how often the things that everyone knows are true aren’t. Here’s an example; it’s a common myth that you should drink eight glasses of water per day. This sounds reasonable, doesn’t it? It is however not strictly true, but is sensible-sounding, all the same. And it’s pretty benign, as myths go – you’ll spend a lot of time excusing yourself from meetings, but you probably won’t do any serious damage, at least unless you persist in the face of what your body’s trying to tell you.
If you are seeking to learn more about targeted sales focus, it is important to separate the myths and misconceptions. Failure to do so can be fatal to your business. I will be covering some of those fatal sales focus myths over the next couple posts.
Myth 1: All Markets Are Good Markets
The thinking goes like this: markets are markets. If I can sell to one, I can sell to another. The fact is, though, that some markets are like three bears fighting over a picnic basket – one bear is going to be eating egg salad and the other two are going to go hungry. Frankly, the beating you’ll take isn’t worth the effort.
Myth 2: Never Leave Money on the Table
However hard it may be to believe, there is some money you don’t want to touch. To know which is which, you have to take a look at the core of your business – specifically, your core competencies and core values.
Myth 3: Specialization Limits Profit Potential
This statement has proven time and time again to be a complete myth. After all, if you want a specific service, wouldn’t you go to the ‘specialist’ in the relevant field? – I know that I would!
Sales Growth Question: What is the one thing that will make your customer buy from you and not another company?
Sales Growth Lesson: Look at the core of your business, especially your core competencies and core values.
Can’t wait to see what other sales focus myths you might be believing? Find the whole list with greater detail in my target market and sales focus ebook, Targeted Sales Focus.
© Copyright 2011, Danita Bye Sales Growth Specialists, All Rights Reserved.
Benefits of a Targeted Sales Focus
Through my experience with it, I have discovered the many benefits of using targeted sales focus. Here are my findings:
- Costs come down and ROI goes up – When you focus on a well-defined market, you’re able to direct sales and marketing money to where it will do the most good – and deliver the highest ROI.
- Insight builds on insight – Use the knowledge you gain to further refine your products and services to fit your target market’s needs even better.
- You get there first – Anticipate future needs and create a solution before your customers know they’ve got a problem.
- You become a specialist – The closer the match, the stronger the urge to choose your business.
- Customers provide more and better referrals – Because your focus establishes you as a specialist, your business is the first one that existing customers will think of when associates mention a problem you can solve, giving you a prequalified and, in some cases, presold lead.
- Devising “pain questions” becomes less of a pain – When you know your customers (and you will if you target them precisely) pinpointing the heart of their needs and selling to their pain points becomes easier.
- Your salespeople get better results in less time – Because you’ve taken the time to get to know your customers, they’re already good fits for the products and services you offer.
- Prospects begin to seek you out – A targeted sales approach may result in potential customers, customers who have run across one of your passive marketing pieces or have spoken with one of your satisfied clients, just show up unannounced, keyed into your message, and ready to buy.
- Market focus leads to effective marketing – When you know exactly whom you want to sell to, the way to sell to them becomes clear. Because you’ve done your homework, you’ll know the unique selling points you should be pitching to your market.
Sales Growth Question: Why do you think if you know your customers better that selling will become easier?
Sales Growth Lesson: Big pay and little responsibility are circumstances seldom found together — Napoleon Hill.
Ready to take advantage of these benefits of a targeted sales lead generation strategy? Check out my sales focus ebook, Targeted Sales Focus or email me today.
© Copyright 2011, Danita Bye Sales Growth Specialists, All Rights Reserved.
Why is a Targeted Sales Focus not a Common Practice?
Given the obvious benefits of using a targeted sales focus, the question should be asked – why is this not common practice in more organizations? Certainly, going by my personal experience, this method has proved to be invaluable over the years.
Most entrepreneurs and business owners have grand visions of someday ruling the world, at least when they’re starting out. And that’s fine – considering all the wet blankets every budding business person has to cope with, dreams of world domination can help to keep the fires burning. The problem is that we tend to hold onto these dreams past the point where they serve us. Sure, they may drive us, but the lack of focus we suffer because of them can drive us out of business. It almost happened to us back in the ‘90s, and it could be happening to you right now.
I say that successful business people are dreamers – they have to be – but they’re also logical and hard-headed. They spend much of their time thinking seemingly rational if/then thoughts such as, “If I sell to the broadest market I can, then I’ll make the most money I can”. Is this way of thinking logical? According to widely held beliefs, yes, in the real world, no.
Perhaps targeted sales focus is not standard practice due to commonly held myths about markets and sales. Or maybe it’s because many are simply unaware of the benefits of a targeted sales approach. Whatever the reason, if you don’t currently have a targeted sales focus it’s time to get one.
Sales Growth Question: What do you think are the benefits of a “targeted sales focus?”
Sales Growth Lesson: Focus on the Emotional Buyer, but Keep a Hard-Headed Focus on Sales Results.
To learn how you can begin finding your targeted sales focus check out my complimentary sales focus ebook here or call me today at (612) 267-3320.
© Copyright 2011, Danita Bye Sales Growth Specialists, All Rights Reserved.
The Difference between Target Markets and Market Niches
There’s no doubt that a targeted sales focus plan can be beneficial to your company. But, before you can research what a target market is in broader terms, you first need to explore the difference between two commonly confused terms: target market and market niche.
I always say that simply put, your target market is a narrowly defined group of customers, while your market niche is the particular product and/or service you offer to your target market. For example, you may aim at vision care practices located in the Pacific Northwest with revenues of less than two million dollars per year and whose management is open to outsourcing administrative functions (your target market). Further, you want to sell to eye doctors within that market your regional offsite patient data management and billing services (your market niche).
A message that specifically addresses how your product and/or service helps improve whatever woes keep the prospect awake at night is also required. Even though this recommendation is well documented and written about, websites still do not include it and most sales people cannot articulate it. You must answer how you solve their pain.
A targeted sales focus is a combination of all the above factors – a well-defined market, customer niche and a well thought out, pain-solving message.
To learn more about effectively defining your target market and market niche be sure to check out my sales focus ebook, Targeted Sales Focus.
What exactly is a targeted market?
“Show me someone who has done something worthwhile, and I’ll show you someone who has overcome adversity.”
- Lou Holtz: Famous Sales Quotes
To fully understand the benefits of using a targeted sales focus plan, first you need to determine what a target market is, and what it isn’t. I would say that a target market is not simply any market that could be interested in your products and services. That kind of “target” is far too big, and requires a scattershot sales approach that will quickly drain your marketing budget and deplete your resources.
As I found out while managing our medical device company, using this unspecific approach you’ll spread yourself too thin and put yourself at the mercy of mercurial market and competitive conditions.
Also, with a target that big, you’re likely to become a “me-too” company. In other words, you’ll be a very small fish in an extremely large pond. Eventually, price will be the primary differentiator between you and other companies. And as I discovered, that’s a race to the bottom that you can’t win – not that you’d even want to.
I find that by spending a little time researching your potential target market, you can avoid stretching your valuable resources out too thinly, and will obtain better sales results.
To learn more about narrowing your target market make sure you check out my complimentary sales focus ebook, Targeted Sales Focus.
How a Lack of Focus Can Be Detrimental to You Business
To quote Jay Abraham: “If you’re attacking your market from multiple positions and your competition isn’t, you have all the advantage and it will show up in your increased success and income.”
I speak to many marketing executives who use a combination of methods to target new business. Most agree that a targeted approach can have a huge impact on getting new business, and in turn, the overall success of an organization. The process itself can be called many things – Market Focus, Customer Focus, Sales Focus, Ideal Customer or Market Niche to name a few. Many terms are used to describe the process, but generally expectations remain the same – to obtain and retain new business.
So, what impact will a lack of a targeted sales focus have on your business?
One of the most common problems I hear about from struggling companies is the lack of clarity as to who the “ideal” or “perfect” customer actually is. This general lack of clarity can result in wasted sales efforts, slower growth rates, lower profit margins and increased sales and marketing costs. Even those companies who had a strong market focus in the past often don’t react quickly enough as technology, markets, companies, customer needs, staff and economies evolve. By not adapting to these emerging trends, they lose market share and profitability.
And why is this? The simple answer is a lack of strategic target sales focus. We typically hear something like this: “A market is a market. A client is a client. A sale is a sale. A dollar is a dollar. In this economy, you take all you can get, right?” The logic is seductive but flawed. Regardless of whatever economic or competitive conditions you find yourself in, a narrower focus wins.
Can’t wait to learn more about what a targeted sales focus can do you for your business? Check out my complimentary sales focus e-book now, Targeted Sales Focus.
Launching a Sales Lead Generation to Improve Sales Performance
Sales Growth recently created a short educational video to launch its Sales Lead Generation and Nurturing Service. So, you can either view here... or, if you’d rather read, here’s the script for the first couple of frames:
Slide 1: Thanks to a drastically changed economic and competitive landscape, traditional ways of B2B lead generation, such as cold calling, don’t work as well as they used to. For that matter, 
few salespeople are the skilled sales prospectors they should be. And sales pipelines that used to be full are drying up fast.
Slide 2:
What’s the answer? Give up cold calling and other tried-and-true sales strategies? No – those are still valid for sales lead generation. When the markets as crowded as it is, relying on traditional B2B lead generation strategies alone leads to frustrated salespeople and fewer sales. Fortunately, the Web, which is the starting place for 70% of purchasing decisions, provides new and more cost-effective ways of reaching out to potential customers. Yet despite the fact that almost three out of four customers are making the Web an integral part of their buying behavior, only one in five companies have a solid sales strategy for using it to generate leads.
Slide 3: Contrary to popular belief, effective B2B lead generation is not about scattering your sales message as widely as you can and then sorting out the resulting sales leads. You simply don’t have the time or other resources to take a shoot first, qualify later approach to B2B lead generation. Instead, today’s market demands that you have a Targeted Sales Focus on highly defined target markets and customers – customers who are already qualified and ready to buy custom-fit sales solutions, not just commoditized products.
For the rest of the sales Lead Generation and client Nurturing Video, click here.
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