By Daniele Lima, managing director, Road Scholars Training & Strategic Consultancy.

 

In recent years social media marketing has been gradually gaining acceptance as a legitimate and when properly utilised, powerful tool in the marketer’s arsenal. And with this rise in popularity and use, has also come a call from various business writers for marketers to forget about segmentation in the traditional sense and instead, adopt the approach of marketing their product to segments of one.

This approach is predicated on the belief  that social media allows marketers greater insight into customer’s needs based on their new found ability to engage the prospect with a true dialog, unavailable before the rise of the current day social media networking platforms.

This potential is well established and where the customer is willing to engage online with the business, a better understanding of the unmet need can be obtained and act as a basis for tailoring solutions that exactly meet that individuals needs.

The rate limiting factor with this approach is that not everyone will be willing to engage with you and in the absence of a proactive and strategic approach to targeting, the result is likely to be an uncoordinated and ultimately unsuccessful effort.

The need for segmentation and intelligent target marketing has not been replaced by LinkedIn, Twitter or Facebook. These platforms provide added insight but do not replace these key pillars that are so crucial to the overall marketing planning process.

With this said the conversation should then turn to what are the key criteria to think about when targeting for your business.

There are three that should be focused on, namely: customer attractiveness, customer growth potential and customer usage.

By customer attractiveness we are referring to how closely does a particular client or prospect match up with your stated target audience and brand positioning.

For this you need to have a clearly thought out and concise description about who your ideal customer is and by extension who your target audience is. This should always be formally written down and contain the following key elements.

Specifically the statement should:

• Describe a distinct place that the brand occupies with the target market,
• differentiate the brand in a meaningful way from rival brands, and
• include a core benefit that will assist the user.

 

For example some years back as a product manager for a leading pharmaceutical firm, I wrote a positioning statement for one of the cardiovascular products as follows:

Brand X is the blood pressure medicine of choice for mature hypertensives, which have declining kidney function, because it offers superior tolerability due to its dual pathways of drug elimination.

 

This statement includes: the target audience you seek to attract (i.e. mature hypertensives), the brand name (Brand X), the product category (blood pressure medication), the core benefit (better tolerated) and importantly the reason to believe in that benefit (dual pathways of drug elimination).

The closer an individual fits this target group the more attractive they are for our brand.

The second criterion is customer potential. Here you are looking at how much of your brand a customer is likely to need to have their needs met. Let’s look at the example of two separate businesses that could buy your product. For example a restaurateur about to open a restaurant could buy a hundred chairs for his venue and therefore have a have a much larger need for chairs than a local convenience store owner about to open that business that will require only a hand full of chairs. Again as with the first criterion of customer attractiveness, the range will be from low to high.

The third criterion is current usage. Does the prospect or customer use the product already and if so how much.

When you combine these three criteria you get a simple model as demonstrated below.

Figure 1.  The Target Market Analysis Model*   **

 

You can imagine a numerical scale of 1 to 10 along each of the three axes, and altogether forming 8 possible quadrants. So which of these quadrants represent the optimal focal points for maximum impact?

A strong case can be made for two in particular.

The first of these is the group that concurrently has high potential, high attractiveness and high usage.

In other words the customer or prospect being targeted has high attractiveness because they fall squarely into the overtly stated target market definition contained within the brands positioning statement.

Fig 2.Typical Long Term Customer Profile with High Potential, High Attractiveness and High Usage Quadrant.

 

Second, they also have high potential because they still require more of the product to have their existing customer needs satisfactorily met.

Finally, they use an existing high current level of your brand, which will usually have been built up as the relationship, experience and overall outcomes with the brand have proven beneficial over time. Clearly this quadrant describes the dynamic of an established client with a high level of customer satisfaction, which would imply a higher level of loyalty to the brand and a greater long term probability of ongoing, repeat business.

In any situation this is a critical group that needs to be analysed, identified and rewarded for their patronage. The second attractive quadrant that should always be actively targeted is that of the high potential, high attractiveness but low (or no) current usage prospect. In this instance we see the potential or former customer, who still has a high degree of attractiveness to the business as they align perfectly to the specified target market, which also have high potential because they still use large amounts of this type of product to meet their needs.

Unlike the first group however who are avid users and already consume high levels of the brand, this group currently has a low level of current use and will require tactical effort by the business to convince them of why this product should be preferentially preferred over other rival brands.

Fig 3. Typical High Potential Prospect Profile with High Potential, High Attractiveness and Low Usage Quadrant.

 

Although you can make a strong case that this is the more difficult group of the two to sell to because it still needs convincing, it remains the group with the greatest dollar potential for growth because the amount that can potentially be bought in the future is much larger than the earlier group.

 

Summary

Wherever possible, a business should attempt to actively define and target the two influential groups outlined in this article, through its marketing and commercial efforts.

Although these targets are distinct groups requiring strategically different approaches to maximise the potential of each, they stand out individually and collectively as the groups with the greatest potential for dollar growth.

 

*Target Market Analysis Model © Road Scholars Training, 2011 

Diagrams Drawn by Trent Rebeiro (Southern Pacific Digital)