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How to Discover Your Perfect Target Customer in 5 Steps

One of the most important elements of a marketing strategy is the development of an ideal target customer profile. Effectively understand who makes an ideal customer allows you to build your entire business, message, product, services, sales and support around attracting and serving this narrowly defined customer group.

Image See-ming Lee SML via Flickr CC

When working with businesses that have an established customer base I can generally identify their ideal customer by finding the common characteristics found in their most profitable clients that also refer them to others. I’ve written about this kind of ideal client discovery here.

Today, however, I want to address the needs of the start-up or business with very little customer experience. Finding and serving an ideal customer is equally important for a business just getting started and establishing a focus on discovering a narrowly defined ideal client from the very beginning will save months of wandering in the dark trying to be all things to all people.

The 5 steps below can put you the path to discovering your ideal target customer.

1) Start with the Smallest Market Possible – This may feel counterintuitive to many just starting a business, but you have to find a group of customers that think what you have to offer is special. When you’re just getting started you may have very little to offer and in many cases very few resources with which to make sufficient noise in a market for generic solutions.

Your key is to find a very narrow group, with very specific demographics or a very specific problem or need and create raving fans out of this group. You can always expand your reach after you gain traction, but you can also become a big player in this smaller market as you grow.

2) Create an Initial Value Hypothesis – In the step above I mentioned the idea of finding a narrow group that finds what you have to offer special. Of course, this implies that you do indeed have something to offer that is special.

You must create a “why us” value proposition and use that as you hypothesis for why us. If this is starting to sound a little like science that’s because it is. You must always stay in test and refine mode in order to move forward.

Many people get caught up in trying to execute their business plan when the fact of the matter is the market doesn’t care about your business plan. The only thing that matters is what you discover and apply out there in the lab beyond your office.

3) Get reality in Discovery Test Sessions – Established, thriving businesses have the ability to learn a great deal every day from customer interaction. Since start-ups don’t have any customer interaction they have to create ways to test their theories initially and on the fly.

The key to both making and affirming your initial assumptions is to set-up what I call Discovery Test Sessions with prospects that might easily fit into your initial smallest market group. These are essentially staged one on one meetings.

This can be a little tricky since you have no relationship with said prospect. I often find that there are industry or trade groups that may contain your initial target market and by joining these you may have an easier time gaining access to this group.

Another possible option is to offer free sample products or beta test relationships to those willing to provide you with agreed upon feedback.

The main thing is that you start talking to prospects about what they need, what they think, what works, what doesn’t and what don’t have now. This is how you evolve your business, your features and your assumptions based on serving a narrowly defined target.

4) Draw an Ideal Customer Sketch – Once you’ve trotted out your hypothesis and tested it with your narrow group, you’ve got to go to work on discovering and defining everything you can about your ideal target group.

Some of this information will be commonly understood, such as demographics, but much of it will be discovered in your test sessions and though some additional research in more behavioral oriented places such as social media.

This is a great time to start your CRM thinking by building custom profiles that include much richer information than most people capture. I wrote about the new breed of CRM that is making this easier to do than ever.

5) Add Strategy Model Components – the final step is to apply this new ideal customer approach to other elements of your strategy.

The thing is, when you discover your initial ideal client it should impact the thinking about your basic business model and overall business strategy. All great business models are customer focused and now that you have a picture of this customer it’s time to consider how this alters the other aspects of your business.

Consider now how this discovery might impact your offerings, your revenue streams, distribution channels and even pricing.

Consider how you can reach this market, who you can partner with and what resources you either have or need to have in order to make an impact in this market.

I can tell you that my experience suggests that you’re never really done with this exercise. As your business evolves, as you learn and grow, this model will evolve as well, but perhaps the continual process of discovery is just as important as what you discover.

How and Why I Use Dropbox

I’ve been covering a number of tools I depend on in this “how and why” format and people seem to be enjoying this so I’ll do it as a regular feature for a bit.

File storage with Dropbox

Image: redjar via Flickr

Today’s subject is the tool Dropbox. Dropbox is not a new kid on the block and lots of folks speak lovingly about this online file storage service. There’s a free version that may be robust and large enough for most, but I’ve chosen the full meal deal because I use Dropbox so completely.

There are other tools that can do all of what I’m going to describe, but from a file handling standpoint, ease of use, and set-up the way I work, Dropbox is killer.

Here’s why

  • I have a small staff and Dropbox is our internal server. We store everything and exchange and collaborate on files just like you would in any server environment. The main difference, of course, is that our Dropbox server is in the cloud and we can easily access all files (even those being worked on by folks back at the ranch) when I travel or someone works from home. (If you elect to Kick Out a team member they will no longer have access to the folders and the files will be permanently deleted from their hard drives.)
  • Dropbox uses a technology that only needs to upload changes so you can make tiny edit to a huge file and it syncs in seconds.
  • I have business partners in other countries and I can share and collaborate on specific files and folders and know that we are all working from and using the right document.
  • I speak to groups in seminars and workshops almost weekly at times and Dropbox allows me to work on a PPT presentation save it and then share a public branded link with groups that need to approve my presentations or as a way for me to share my slides without have to transfer or upload anything – I just save the file as I work and then share the public link on my last slide (I wrote about setting up my own branded link shortener here and I love to create custom links to my presentations like ducttape.me/sxsw for example)
  • All of our files are automatically backed up and synced in multiple places at all times.
  • I have iPhone and iPad Dropbox apps that allow me access all files on these devices as well. I’ve made more than one presentation on my iPad and I love the remarkable intimacy of that tool.

How I use it

As I said in the beginning of this post, there are free and low cost options that most people can use and get tremendous value. Because I depend on this tool so much I’ve opted for the Team Version and we pay an annual fee that may seem pretty steep, but the no hassle factor is worth it.

With Team we get to share the giant storage quota, Rewind to any version of a file, and encrypted transfer and storage.

  • We create and organize folders just like you would on any server for all of our most important work categories and then everyone works from those folders and saves the work directly to them. The feature that makes this work so well is that the Dropbox app loads on all of our staff’s hard drives and then all files show up on their computer just like they would on a hard drive. There’s no need to go to the web, the files are just there.
  • We also create personal folders for each team member to act like their MyDocuments folder for work in progress.
  • I backup all my websites and blog databases routinely to Dropbox.
  • I store a portable version of Firefox on Dropbox so that if I get stuck and need to use a loner computer I have all my extensions and bookmarks
  • I back up my entire music library to Dropbox and can access it from any computer

So, have you found any other great uses for Dropbox that I may not have considered?

Make It Your Year of Getting More Done

Let’s face it, if you own a small business, there’s probably more to do than time in the day, week or month, right?

Smart Time AppThe key is to get good at doing the high payoff items and planning for what needs to be done when. Prioritizing is how you make decision making easy and help everyone stay focused on the tasks that produce wins.

One of the foundational elements of the Duct Tape Marketing System is the idea of living by the marketing calendar. If you take the time to identify what it is you think you want to do with your marketing and then commit it to an annual calendar, it’s more likely that you will actually get to it on a consistent basis.

There’s something very powerful about the visual reminder that you’ve committed to producing a press release every month for example.

While many people are familiar with the idea of a marketing calendar, few actually live by it.

Over the years I’ve also trained business owners to use the marketing calendar in another very powerful way. Quite often there are projects that are identified during the planning process that simply can’t be accomplished with the resources available today.

One of the most powerful things you can add to your calendar routine is monthly themes around foundational marketing projects so you break them up and spread them out over the course of a year. So, February becomes “start a blog month” and March is “start an enewsletter” and so on. This way you don’t get overwhelmed and at the end of six months you look up and you’ve accomplished a great deal.

Here’s how the marketing calendar process works:

Step 1 – Create a monthly calendar in Excel or Google Docs. Break the columns into weeks so you can plan in that space. Down the left side add categories for all of the major chunks of your marketing. At the very least this would include Advertising, Public Relations, Referrals, Social Media, SEO, Content, Events and Your Monthly Theme.

Step 2 – Choose a monthly theme and put that across the top near the name of the month.

Step 3 – Fill in all of the planned activities that you can by either describing them or putting an X in for routine activity like a weekly blog post or Facebook update.

This is an example of how to set you calendar up

Download the Spreadsheet

Once you lay it all out on the calendar you’ve also got to break it down into weekly and daily action steps and assign tasks accordingly.

Sometimes that means assigning yourself a bunch of tasks. You can do this by creating different daily calendars in Outlook or Google Calendar and creating color coding that allows you to focus on assigning tasks for different topics and then having a visual display of your day’s focus on multiple areas of marketing.

Another innovate calendar tool for the iPhone and iPad actually looks at your day and helps you schedule activities as it learns what you need to do. – Smart Time

5 Ways To Reward Your Community

Christmas gifts

Image grabadonut via flickr

This time of year, in particular, people turn their thoughts towards saying thanks to their most important personal and business relationships. Traditional gifts such as gourmet food baskets, flowers and iPads go a long way towards this goal, but their as a few other significant ways to reward your community that may just last a little longer than that bar of Ghirardelli Dark Chocolate Peppermint Bark.

Now the word community gets bantered around a lot these days, but for the small business I consider the collaboration universe of your prospects, customers, suppliers, staff, advisors, partners and, in some cases, competitors to make up the community.

Below are five ways to reward that community.

Appreciation

I can’t tell you how far saying thanks goes. Many people do things, such as refer your business, because they know you can help, but it’s sure nice to know that you appreciate the gesture. This is a great place for me to, once again, promote the idea of hand written notes. Don’t reserve this for external folks either, tell your staff, your internal team, thank you and don’t save those words for the annual company Holiday lunch, tell them when they’ve done something well. Pick up the phone and leave messages of appreciation on routine basis.

Education

I think one of the best things you can do for folks is share your knowledge and help them gain a new skills and tool sets. This can certainly come in the form of hosting or presenting training, but it can also be in form of books or a subscription to a tutorial service like Lynda.com. We bought the entire Duct Tape Marketing Consulting Network a copy of Nancy Duarte’s Slide:ology because I think it’s a great book for anyone that needs to create presentations. If you have a special expertise, even if it’s not strictly related to your core business, share it with others as a way to say we care.

Information

One of the ways to show your community that they matter to you is to make sure they have information that others may not. Sure, you can take this as far as creating closed door membership portals or you can simply tell your newsletter list or customer list something that’s coming up before you announce it to the world. Bring your community members into your product development, strategic planning and marketing meetings by some process that allows them to weigh in and give you feedback and insight. These types of gestures help your community feel much more connected and often turn them into some of your biggest evangelists.

Recognition

Recognizing the achievements of others is a great thing to do in the big picture of life. Doing so in business returns rewards that keep the cycle of giving and receiving primed and working. This certainly includes your staff, but keeping tabs on you clients, partners and advisors via Google Alerts or some other form of social network monitoring and making a point of recognizing accomplishments is a powerful thing. This can be a simple as a birthday card, retweet, or clipping a newspaper article and sending it along with note.

Introduction

One of the biggest thrills I get these days is when I can make something happen for someone in my community. This past year I’ve been able to refer business to people, introduce a budding author to my publisher, and connect several bloggers and speakers with clients that could engage their services. Opening doors to opportunities and creating introductions for a team of strategic partners is one of the greatest ways I know to reward your community and build your business. The fact that this works to benefit both parties in the introduction is a tremendous benefit.

The beauty of everything I’ve mentioned in this post is that if it’s done out of trust, mutual respect and the knowledge that your rewarding behavior is the best way for you to help your clients then you’ll never fear you’re giving is too much or that it’s not reciprocated in some manner – and that’s the best gift you can give to yourself.

7 Little Words That Sum Up the Entire Marketing Machine

Marketing is essentially getting someone that has a need to know, like and trust you. Of course then you must turn that know, like, and trust into try, buy, repeat and refer.

That my friends is the entire practice of marketing summed up in seven little words that make up what I call The Marketing Hourglass.TM

The idea behind the hourglass is that you look at each of the seven stages and intentionally plan products, services, processes and touches that logically move prospects along to the point where they become customers and then receive such a remarkable customer experience they become repeat customers and referral advocates. I talk a great deal about building your hourglass in my book The Referral Engine.

If you do nothing but spend the time to fill in the blanks in each of the stages in the infographic below you will be miles ahead in your thinking about a simple, yet powerful approach to your marketing. Feel free to print, share and use the graphic to help build your marketing hourglass

Click on the image to enlarge and get a bird’s eye view of your entire marketing machine.

Installing a Selling System

weakest link

Image Credit: _-=Dreemreeper=-_ via Flickr

When asked to consult with a business, and challenged to make the biggest impact in the shortest amount of time, I always go to work on lead conversion first.

Lack of any asemblance of a systematic approach to selling is the biggest weakness for most small businesses. The focus of marketing is almost always on generating more leads. While leads are certainly important, the obsession with generating them consumes a significant amount of time and money.

Installing a sales system, one that everyone involved in selling in the organization operates, is the fastest way to improve overall marketing results. (I’m assuming you’ve also narrowly defined your ideal client, created a significant way to differentiate your business, and are consistently building trust through educational content.)

The end result with every business I’ve ever worked with was that we dramatically reduced the number of leads they were chasing (decreased expense) while also dramatically increasing the number leads they were converting to customers (increased revenue.) I’ve seen lead conversion rates go from 3% to over 50% when all of the parts of a total marketing system work together.

If you’re moving prospects logically through what I call the Marketing HourglassTM you will see that by the time they get serious about a buying decision they’ve already sold themselves. This approach almost makes selling a non issue and delivers stunningly high conversion rates.

Below are the essential ingredients needed to operate your lead conversion system

  • Discovery – You must have a planned response when a lead asks for more information. I know this sounds obvious, but few businesses do more than react. In order to move prospects you must have a call to action, education plan, and filter that helps qualify and direct leads to the next step. This is a significant step and one that can help you stop chasing the wrong leads while also giving your an opportunity to create a unique experience. Interrupt the norm for your industry here and you’ll help further cement how you’re different.
  • Presentation – Once a prospect determines they need to know more about your specific offerings, either by way of a demo or sales call, it’s important that you have a set way to present your organization. This is a point where many sales folks go out and try to answer the questions that prospects have. The problem with this approach is most prospects don’t know what questions they should have; so it’s really up to you to start adding value in the relationship by presenting what you know is useful, while also discovering their unique challenges. This is part scripted, part art, but it should be practiced consistently across the organization.
  • Nurturing – Depending upon the buying habits of your ideal customer or sales cycle for your particular industry, you will need a systematic approach for keeping leads that are starting an information seeking process warm as they move towards a buying decision. This is a place where technology can certainly help you make automated contacts via email or snail mail. Creating planned education events such as online seminars and peer-to-peer panel discussions is also another very effective way to nurture leads and continue to educate.
  • Transaction – For many in selling, the game ends when the customer says yes. Your lead conversion system must be created in a way that delivers the same experience once a prospect becomes a customer as was delivered throughout the courting period. The best way to do this is through a planned orientation process where you continue the educational approach by teaching the customer how to get the most from what they’ve agreed to buy. This can be through simple training video or a more elaborate new customer process, but this important step leads to a smooth transition from prospect to customer and often sets the tone for additional purchases and referrals.
  • Review - Your selling system won’t be complete until you create a process that allows you to measure and communicate the results your customers are experiencing. One of the best ways to do this is through some form of a planned results review process. By setting the expectation for this process up front you send a very strong signal that results matter, but you also get the opportunity to address issues that didn’t go as expected and collect client success stories and testimonials from your happiest clients.

5 Ways to Let Prospects Sample Your Brilliance

sample

Image credit: avlxyz via Flickr

One of my favorite things to do is visit my local Whole Foods on a Saturday morning. On top of getting a kick out of the mix of people-watching, there’s also a pretty good chance I’m going to be able to put an entire meal together from all the suppliers and farmers on-site passing out samples of their products.

See, Whole Foods and just about every grocer I’ve ever visited, understands that every 4th or 5th person that tries Jim Bob’s Lavender Kissed Cantucci di Prato is going to buy several packages. In most cases, they are counting on these being people who have never done so before. The hope, of course, is that this taste will lead to a sale, which will lead to getting you hooked for life.

The key here is to lower the barrier to entry; by either making the offering free, or creating a lower risk way to try a version of the offering. Any business, including service businesses, can tap into the power of sampling with just a little bit of creativity.

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What Kind of Business Should I Start?

The title to this post is a question I receive often. So many people want to start their own business these days but, are at a loss as to what to do.

It’s a tough question really and one that needs to be approached as many things in life – from a strategic standpoint first.

See a lot of folks just want to jump right into tactics – what’s hot, what can I make money doing, what are my skills, what’s my background – but that’s only part of the equation.

The first thing you must answer is this – What do I want out of life?

I know, I know, it’s only the biggest, scariest, hardest question on the planet and that’s why so many people just skip it.

Here’s how that applies to your business though.

There are two kinds of businesses, generally, from a strategic standpoint – the business of passion and purpose and the business of profit and practicality.

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