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Marketing To Your Customer Types

Corte Swearingen

August 27, 2008

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If you're like most small businesses, you are marketing to all your customer types in the same exact way. But what if I told you doing this is a very ineffective way of obtaining new customers?

The fact is that everyone comes to your business at a particular stage. Some people are just hearing about your company for the first time, others know about you but just want additional information, and some are ready and willing to buy on the spot. However, treating all these customer types the same is a drastic mistake.

By learning to market to your customer types based on the particular stage they are at, you will be able to ultimately convert more people to repeat customer status. It's not difficult to do but will require some effort on your part. Here's how it works.

Every company has the following customer types.

Suspects: Suspects are people you think might be interested in one or more of your product/service offerings. A suspect has not established any contact whatsoever with your company. When you define a target market, you have essentially created a bucket of suspects. You're goal is to get these suspect customer types to raise their hand and give you permission to market to them.

Prospects: A prospect has made some sort of communication with your company. Maybe they signed up for your newsletter or called your company to ask a question. At this point, they have made some type of inquiry but HAVE NOT made a purchase. Your goal is to get your prospect customer types to make an initial purchase.

First-Time Customer: Once a prospect makes a purchase from you, they are classified as a first-time customer. Your goal for first-time customer types is to get them to become a repeat customer. In other words, you want to retain them as customers. It is much easier to market to existing customers than to prospects or suspects.

Multi-Buyer: A multi-buyer is any customer that has purchased from you more than once. Once a customer makes that leap into multi-buyer territory, the goal is not only to retain their business, but to move them up to more expensive products and services. Multi-buyer customer types are your most valuable group.

You're now going to learn how to create a compelling offer with a very low point of entry for your suspect customer types. After this, you will create a different offer geared to your prospects, another for first-time buyers and yet another for your multi-buyer customer types. As you move up the customer chain, your offers will focus less on creating trust and more on selling higher-profit goods and services. Notice I said "focus less" on creating trust. Your marketing materials will continue to build on the trust you have created but the need for proof is much less for an existing customer than it is for the suspect or prospect customer types.

Let's begin with suspects.

Creating a Marketing Offer for Suspects

There is really only a single goal for marketing to suspects - and that is to convert them to prospects. How do you do this? Simple. You offer them free information that helps them solve a business problem. If they accept this offer of free information, you have just converted them from a suspect to a prospect. By actively requesting this information, they telling you that they are interested in what you might be able to do for them.

So, whether you have a product or a service, you need to start brainstorming ways you can provide free information to your suspects. In addition, you also need to find an inexpensive way to market to them and a very easy way for your suspects to respond. If your suspects have to jump through hoops in order to request your free report, many will simply ignore you.

Here are some ideas you might use to create a compelling offer for your suspects.

• Free report
• Free monthly newsletter
• Free product demonstration
• Free seminar
• Free book
• Free guide or checklist

Do you see the common word in the above list? Whatever you pick, it must be FREE. Your suspects do not know who you are. They have not established any trust with you. This free offer will be the first step in creating that trust. People don't like to be sold to and if you simply try and sell suspects before creating this trust, you'll turn them off. Sure, you may get a few to convert, but you'll get a lot more if you're able to establish trust and competency with a free offer that proves to these customer types that you're an expert in your field.

There are two main rules to keep in mind when you create your suspect marketing offer.

1. The title of your offering must communicate that a solution to the suspect-s problem is available.

2. Obtaining the free offering should be a very quick, painless, and simple process for the Suspect.

If you don't follow the above rules, your chances of converting suspects to prospects will greatly diminish.

Let me give you an example of how to design a marketing offer for your suspects. Let's say you are roofing contractor that specializes in commercial, industrial and institutional roof installation and repair services. The name of your company is NRR Roofing. Basically, your local business has the ability to install and service any non-residential roof. That's a lot of suspects that could be turned into potential prospects and then to customers. It makes sense to spend some time crafting a compelling offer for these customer types.

You decide that the best way to communicate to your suspects is through educating them on factors to consider before hiring a roofing contractor. You decide to print up a free 25-page report titled:

"10 Critical Factors You Must Know Before Hiring a Roofing Contractor."

In this report, you lay out 10 important factors that building maintenance managers should consider in order to save money and get the best quality job performed. You also include the following tips in this free report.

• Tips on extending the life of your roof
• How to keep your manufacturer's warranty valid
• How to ensure the performance of your roof system
• How to prevent unwarranted leaks
• How to secure the serviceable condition of your roof
• How to save money by avoiding crisis management
• How to safeguard building contents
• How to create historical roof service records

Get the point? Your job is to create a report so filled with relevant and useful information, that building maintenance personnel everywhere will be lining up in droves in order to get their FREE copy. Your report also includes information about your website, your complete contact information, and a few testimonials. You do not include ANY selling in this free report. It is informational only!

Now that you have your report, you decide to distribute it through two methods. First, you print up 1000 single page fliers that describe the benefits of this special report and the fact that it is completely free. This flier is addressed to the building maintenance supervisor and gives specific instructions on how the report can be downloaded from your website or mailed to them by calling a phone number. You then hire a high-school student to go around and distribute the flier to buildings in your local area. All the building supervisor needs to do is to provide their name and email in order to download the free report.

In addition to this manual distribution process, you also place a signup for the report on your website homepage. All the web visitor needs to do is enter their name and email address and they get an instant link to download the report on their computer and print it out.

Imagine by doing these two things, you get 200 businesses that request the report within the first month. These are 200 suspects that you have just turned into prospects. Imagine that through continued marketing, you convert just 20 of these businesses into customers and are able to sell them service agreements that add up to $100,000 of additional revenue per year. That's a very good return on investment for a low cost marketing promotion. And that doesn’t even factor in the continued revenue for companies that continue to renew their service agreements.

Are you beginning to see the power of marketing to your customer types?

What do you do after a suspect becomes a prospect? How about mailing them your marketing communications folder? Yes, the very same one you developed by reading this article. Mail them out a packet or drop it off in person and follow up to schedule an appointment.

Creating a Marketing Offer for Prospects

Once a suspect becomes a prospect, you will have the confidence to begin marketing your products and services in earnest. The key here to create an introductory offer that has a low enough price point that the prospect feels they have nothing to lose in trying it out.

This offer must only be given to prospects and not regular customers because it needs to represent a substantial savings off the normal product/service price. The point here is to provide something of value for a price that is almost too good to pass up.

It is important that your prospects understand that this is a special one/time introductory price so that they may test your product or service with low investment on their part.

Let's go back to our roofing repair company and see what they did in order to convert their prospects into first-time customers. Remember, their prospects have already requested their free report so they already have knowledge of NRR Roofing and their abilities. NRR decided to give a 50% discount to all commercial business prospects that agreed to also purchase a 10-year service contract. NRR Roofing knows that the most lucrative part of their business is in selling service contracts. By lowering the cost of entry for replacing a roof, the prospect would save a substantial amount of money but all maintenance work over the next 10 years would be done at full profit. This is a win-win situation for both the prospect and NRR Roofing.

By doing this, NRR Roofing found they were able to convert 20% of all prospects into eventual first-time customers.

Creating a Marketing Offer for First-Time Customers

Your number one goal for first-time customers is to get them to purchase something a second time. With these customer types, the barrier is much lower now that they have made their first purchase commitment but that doesn't mean there isn't work to do. Ask any company the percentage of customers that purchase a single time and never make a second purchase. I guarantee that percentage will be fairly high.

The key here is to find additional ways to provide higher end value to first-time customer types so that they continue to do business with you. You must find a way to create special package or service offers that cater to them. This could include special membership offerings, products and services from strategic partners, or upscale premium services that are not offered to anyone else.

For NRR Roofing, they came up with on-site training programs, extended service agreements, and special savings on 3rd party products to help entice first-time customers into becoming multi-buyers. In addition, they came up with a referral program that provided additional benefits for each referral that became a customer.

By simply designing specific marketing offerings for their specific customer types, NRR Roofing was able to decrease the yearly cost of their marketing program while greatly increasing their company revenue.

Selling More to Your Multi-Buyers

Once someone has made multiple purchases from you, your job is to entice them with high profitability products and services. This means you need to create a portfolio of product and service offerings that will appeal to these multi-buyer customer types. Here are some suggestions.

1. Add accessories to a product. See if there are ways of adding additional product add-ons or related items. This is a great way to continue adding value after the initial sale.

2. Attach a special service. Many companies find they can make large profits by attaching a service to a product either with the initial sale or afterword. This could take the form of special in-house training programs, maintenance contracts, or even consulting services.

3. Offer bundled packages. See if there is a way for you to bundle products, accessories and services in a fixed-price package. These larger packages can be extremely profitable and you will be marketing them to your multi-buyers. When you come up with a package, make sure to give it a great name and market that name on your website and sales materials.

As a final word, let me say that if you can find ways of creating additional value for your multi-buyers, you will be able to sell them high ticket items at high margins. Offering discounts to your multi-buyers is not a good strategy. You've built up confidence and trust with these customer types, don't mess it up by offering steep discounts. Sell them your valuable products and services at full price!

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