I have heard companies complain about the cost of target marketing and the question has come up more than once as to whether it is really necessary. Those holding the checkbooks would most likely say the answer is dependent on the cost; but that is a bad way to decide how to market. Sure everyone has a budget, but if you are looking at your budget strictly from cost you are only considering the front end, and you are most likely losing money, even if you don’t know it.
Let’s break this down in a simple way; let’s say your product or service is for homeowners, and that it does not apply to those that do not own a home. You can do an email campaign, or a direct mail campaign, or any other type of direct marketing fairly inexpensively if you do not target, so in many business owners minds, this is cheaper. But I am here to tell you, it’s not cheaper; sure you may have made a profit meaning you brought in more than you spent, but I say you lost money. Here’s why; according to the U.S. Census 65% of the adult population in the U.S. own a home, and that’s your customer right? The problem is by not targeting you are adverting not just to those that own homes but to the 35% that do not own homes as well. What does that mean? It that no matter what you’re sales end up being, whatever you spent, 35% of it was wasted.
Had you target marketed your front end cost would have been higher, however instead of reaching only a portion of your market you would have reached one hundred percent of your market, meaning your sales would most likely increase and your back end profit would outweigh your front end sales. Now there are products that do not need target marketing because they apply to the population in general, but that is exception rather than the rule. Most products or services have a specific target or targets which will naturally increase the level of sales. Don’t take my word for it; research target marketing and see what you find.
Over the years I have had many people tell me how lucky I am to be self-employed, how lucky I am to be my own boss; the first thing I tell these people is luck had nothing to do with it. Lottery winners are lucky; people in business, well we work for a living, we build, we create; now don’t get me wrong, there definitely can be an element of luck; being in the right place at the right time, but luck did not build a business, that was hard work, ingenuity, perseverance, sweat, blood, and tears, and the vision to get there. People seem to think that because you work for yourself, because you are a successful entrepreneur, that it’s all a fantasy life. I and anyone else that has built a business can assure you it is not all fun and games… Continue reading “Are Entrepreneurs Lucky?”
In business we often talk about branding and how to capture customer loyalty over the competitors and there is two major ways that this can be done; one is branding the product itself, the other is branding the company. When it comes to branding a product you need to do something that makes a product that is similar to the competition stand out. For example, zip lock potato chips; the product is the same but the packing is unique; you need something that differentiates your product from the competitors. The other option is branding your company itself; companies that have various products often go this route in order to create customer loyalty to the company as a brand; they do this so that when they gain a customer’s loyalty it is not simply for one product but for the company overall. When you are shopping if you are loyal to Johnson & Johnson, they make hundreds of products, so you may purchase a variety of products simply because you trust this brand. Continue reading “Brand Building through Customer Loyalty”
Last year I wrote an article titled “The Rules of Acquisition”.. Below I have re-posted that article to refresh the memory of those who have read it, and to introduce it to those who have not because next week I will be adding additional rules.
The Rules of Acquisition
Anyone who is a Star Trek fan is probably aware that the race the Ferengi are ruled by business, they come from a world that has created an entire society completely wrapped around profit and business and to guide every Ferengi in their life-long pursuit of obtaining profit they created the “Rules of Acquisition” a book of 285 rules which cover just about every situation that you can think of. Some examples of these rules are:
Once you have their money, you never give it back
Opportunity plus instinct equals profit
Nothing is more important than your health, except for your money
The bigger the smile, the sharper the knife
Free advice is seldom cheap
No good deed ever goes unpunished
You are probably asking yourself why I am telling you about a make believe extraterrestrial life and their make believe Rules of Acquisition. Because I have decided that, while the Ferengi and their rules are make believe, all of us in business could use our own Rules of Acquisition; so I have decided to write my own. Now I think 285 rules are a bit much so I will just start with a few and I may add on to them as time goes by. Continue reading “The Rules of Acquisition”
Many business ideas are interchangeable from one place to another, and there is a healthy influx of new business ideas exchanged between the US and the UK. OK, admittedly it is often us coming over there, picking up ideas, and transplanting them in this country. But sometimes some developing business opportunity comes along that seems to be happening in both places at the same time. Over the past years there has been a huge increase in the demand for local beers and a proliferation of micro breweries. It seems to be one of those hot new things just happening right now. Continue reading “I will drink to that…”