Target Marketing -- 1

Target Marketing
Part One

See also:
Target Marketing -- Part Two
          Business communications are especially susceptible to buzz words. While terribly overworked, buzz words sometime do bring fresh insights to familiar activities. Target marketing is one of these buzz words.

          Target marketing has been a commercial custom since the bazaars visited or fashioned by the nomadic caravans more than 4,000 years ago. The gift shoppe situated on the main street of a holiday resort and the Hertz car rental facilities at a major airline terminal are present-day models of target marketing. Even the traditional schoolchild’s lemonade stand on a hot July afternoon exemplifies target marketing. In fact, all effective marketing has always been targeted. So, what’s new?

          Now living in an ever-changing and highly-complex society, what is new are the advanced tools available to the owner/manager of the smaller business to strengthen its present market position and to exploit additive market opportunities. Some of these basic tools have been around for a long time. The charming guest book in the gift shoppe on the main street in a holiday resort is now known as the data aggregation resource for a database. For even the tiny seasonal boutique, this database -- a/k/a "mailing list" -- can be a powerful tool for developing off-season sales.

          The primary target market for any business is our present or potentially-interested customer. The database for this target market is simply a complete and functional list of our present and potentially-interested customers. Inattentively, many smaller businesses fail to capitalize on the power of these present and potentially-interested customer lists.

          Today, the immense power of database management is available to even the tiniest business through modestly-priced PCs. Customer lists can be categorized and indexed in a variety of ways, e.g., by size, by geographic location, by specific product interests/needs, by pricing preferences, and/or even by credit status. A customer database is all-too-frequently a neglected gold mine. In gold mining, it is commonly necessary to extract and process at least 62 tons of ore in order to obtain one ounce of refined gold.¹ Astute management performs a comparable mining operation to extract the gold often hidden in the smaller business’s own database.

          Customer surveys offer at least two advantages. First, it is a prima facie demonstration of our interest in our customer and our presumed commitment to better serve him/her. It is a positive way of communicating with our present, past, and potentially-interested customers. Everybody craves attention. Thus, a customer survey inevitably offers a much better return in enhanced customer relations than the same dollars spent on traditional advertising.

          And second, a thoughtfully-designed customer survey will give us a much better understanding and factual basis of our customers and their individual needs, dissatisfactions and expectations. Some survey information may trigger an immediate response to meet a previously-unknown customer requirement or to plumb a customer discontent. But most of the survey data can be used to enhance our customer database. Routinely-available database management programs enable much more customer-specific information to be assembled than merely name, address and telephone number. If desired, the database can be integrated with point-of-sale (POS) records to provide real-time customer profiles. Mail merge programs can extract the appropriate information from the database to "personalize" form letters and envelopes/mailing labels, to assemble thorough call lists for telemarketing, to design special offerings and promotions, to recognize customer purchasing patterns and preferences, and to evaluate customer/product relationships. Yesterday’s merchant came to know his customers by sitting around the cracker barrel and talking. Today, we may often get to know our customer even better through the perceptive manipulation of a reliable database.

          To strengthen its present market position, the primary job of the owner/manager of every smaller business is to know and stay connected with our customers. Some of this work can be done quite effectively at Rotary Club luncheons and on golf outings, but the key to success is more often to be found in meticulous database management. While we now have the help of some fine new tools, the essentials of this first step of target marketing has changed little in 4,000 years. The best customer is not the possible transnational customer overseas or even in the next county. The best customer is the customer already known to us -- the present or past customer or the potential customer who has already approached us in some way expressing an interest in our service or product. This customer is still our primary target market!
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¹ There are 31 grams per ounce of of gold, and the ore normally has <0.5 grams/ton [Fernando Nietzen, geologist].

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Thomas A. Faulhaber, Editor
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URL: http://www.businessforum.com/target1.html
Revised: April 1, 2004 TAF