Identify Your Market, the Secret Ingredient for Relationship Marketing Success
Good marketing starts with a clear definition of your target market. In fact, any good marketing text will tell you that it is crucial to identify your target market if you want to be successful in business. You must know who your target is so that you can craft the best marketing message to convey the value you offer to any potential buyer. Understanding your target market enables you to design the features or services that you will take to market. This could include things like price, packaging, distribution and a range of other issues that impact on market share.
Put simply it comes down to three basic facts:
- • Who wants my product or service?
- • Where will they find them?
- • How will I reach these potential buyers with such a compelling message that they will buy what I have to offer?
Doing business by referral revolves around generating referrals that result in closed sales. In referral marketing the marketing message is always the same. It all starts with a clearly defined target market.
Why is target market so important?
There are many reasons why target market is so important. A clearly defined market will enable you to create word of mouth marketing within a specific buying group so that business comes to you. How do you become known and get people to refer to you?
You could join a business group, trade Association or Club and build relationships with people within that target market. You could write articles for that target market or offer to serve in a leadership capacity within the Association or Club. As people in that target market begin to get to know you either personally or by your reputation and they hear good things about the services you provide, they may seek you out and buy from you.
OK, so you understand the power of word of mouth advertising, how do you use that to generate more business? If you have the luxury of a small target market you can simply create a positive relationship based business by doing a great job and relying on the satisfied customers you have to spread the word about you among the rest of that target market. Sadly, we don’t always have small and concentrated target markets like this.
Two very different people attended one of my sessions on relationship marketing recently, both wanted to learn how to get more business by relationship. Both worked in the financial planning industry and understood the importance of doing business by relationship. We’ll call them Planner A and Planner B. We focussed in on target market. It was easy to identify which financial planner was going to be more successful.
Planner A said their target market was anyone with money to invest and wanted a secure financial future. Planner B had a very different perspective. Planner B said they wanted to work with young professionals between the ages of 25 and 35 years of age, preferably couples with no children and clear financial goals.
Planner B wanted to work with people who were clear about their future and because they were in the same age bracket understood the issues and challenges they faced. Not only that they knew that young professionals often had a habit of spending up big and not saving for the future. This planner had lived a very basic upbringing and wanted to secure a sound financial future for themselves and was passionate about spreading the word to other young professionals in the same age bracket. They were very clear on their target market.
Both financial planners were competent however Planner B had targeted young professionals, was more passionate and it literally oozed out of their pores. Combine that with a clear target market and it was obvious that Planner B was destined for success. This planner only had to work with a few young professional couples and I predict word would spread fast among the target market, bringing more and more referrals and of course closed business.
Planner A would have to pitch their services to clients everywhere hoping to find someone who will work with them. They will not have the ability to get referrals from a clearly refined target market like Planner B. Other than being competent they have little extra to offer to potential clients other than they are a generalist, rather than a specialist financial planner.
The message for business owners and sales people is clear, if you don’t have a clearly defined target market, you must spend time defining one. With a clearly defined target market you will create a steady stream of referral business.
Lets get one thing straight, just because someone gives you a business referral, doesn’t mean you automatically have a sale. This referral is simply an opportunity to do business with someone who you have been recommended to. If you can provide the expected products or services that the prospect is seeking and they are satisfied with the process, then you may have the privilege of doing business again. If you can’t get this first sale across the line your referral source will most probably dry up.
The issue here revolves around your ability to sell. Anyone who has experience in relationship marketing will tell you unequivocally that sales skills are essential as well as relationship marketing skills. In fact sales skills are needed in every part of the process, not just closing the sale.
Dr Ivan Misner the father of modern networking researched referrals versus sales in the early 90’s. He found that thirty four percent of referrals made between business’ owners resulted in recorded sales. An interesting statistic, not amazingly high, though significant for business owners in terms of the power of referrals versus sales.
Subsequent research by a university student replicating Misner’s original research conducted around ten years later revealed some more interesting facts. Thirty four percent of referrals made between business owners resulted in a recorded sale. Yes you are suffering from déjà vu. The exact same result as ten years before!
What does this mean for business people? Sales skills are important and some people are better at closing sales rather than others. However one does not exist without the other. You are thirty four percent more likely to make a sale if you get a referral and sales skills are an essential ingredient of that process. There are countless avenues available today to learn the art of sales
The worst thing that you can do after you receive a referral is to be aggressive, indecisive or evasive. The prospect wants and expects a high level of respect, service and professionalism. Remember this is a win-win situation and the better you come across at this stage, the better it will be for both parties. You get the business, they get the goods or service.
Once you meet your prospect, you have to persuade them to bring the sale to a close. This is what people think of when you suggest the term sale.
Third, once you’ve made the appointment, persuade the prospect to buy your product or service. This is the part that usually comes to mind when one hears the word “sale.” Integrity is paramount at this stage. The prospect should know exactly what to expect: no hidden charges, no unexpected exceptions and no bait-and-switch. If you’ve created a highly efficient system of generating referrals for your business, you’ll see a steady stream of referrals. This doesn’t guarantee that you’ll be capable of closing any of them. It takes sales skills to turn prospects into new clients or customers.
The message about sales in referral marketing is this: If you’re not comfortable in sales or if you haven’t been professionally trained, sales training is a worthwhile investment. Keep this message in mind and it’ll serve you well in every aspect of relationship marketing.
© Lindsay Adams 2018. All rights reserved.
Lindsay Adams is a relationship management specialist, he works with leaders who want to leverage the power of relationships, to lead better, sell more and build better teams.