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by Terry Brock
Want a strong competitive advantage against bigger businesses? Want to
know
how your small to medium-sized business can trounce those more well-heeled
competitors?
The secret is cohort marketing. This is the finding of a new study
released
by Forrester Research and Information Resources, Inc.
The study showed that traditional marketing which focused on brand
management is not as effective as the marketing that is directed towards
specific types of customers based on their previous buying patterns. The
study went on to say that "past purchases are better indicators of future
intentions than are demographics."
That can save your small business a lot of money.
Rather than sending mailers to, say, all the females 18-54 in a given number
of zip code areas, you can target those customers who have already purchased
certain types of information. That means that you have to collect the
data.
This is where technology comes into the picture.
Having a sound data collection, data tracking and data mining system can be
invaluable for your growing business. You know who has purchased from you
and know what is important to them.
Think about doing this also for your customers if you don't have large
numbers of customers yet. Target your customers' customers. Find out
who
is buying from them and why they are buying from them. A carefully
selected
and worded direct mail piece to those that have purchased in the past can be
much more profitable than a random shot-gun approach. Enter into
joint
ventures where you help mine the data of existing customers in exchange for
joint promotions.
This all revolves around the important area of CRM (Customer Relationship
Management). For large groups of people you need data that you
passionately
pour over to find out what customers want and are willing to pay for (key
point). If you target only a few people, keep solid, impeccable details
along with lines of what Harvey Mackay suggests in his best-selling book,
Swim with the Sharks Without Being Eaten Alive. As you get to know
someone,
keep records of what you learn about them.
Harvey Mackay has his "Mackay 66" which is a list of 66 questions
about
people. The Mackay 66 includes questions like, Where they went to school,
what are their spouses/significant other's name, children, religious and
political preferences, etc. In other words, get to know your customers.
Not just standard address, fax, e-mail numbers, etc. Get to know what they
like and don't like.
Cohort marketing requires a different way of thinking than brand management.
Brand management focuses on you, how customers perceive you, etc. Cohort
management focuses on them. It focuses on what they have purchased and
what
they are likely to purchase in the future.
True cohort marketing will require a combination of skills. You have to
have a passionate, sincere desire to learn about customers and what is
important to them. Know them. Think like the general store manager
of old
who knew his customer and their buying patterns.
The second area needed is the technology. Larger businesses can afford to
have banks of high speed computers with trained IT staffs to run them.
However, your small business can lean on the services of software packages
like ACT!, Outlook, GoldMine and others to get the job done. Consider
using
some of the services from application service providers like Sales Force.com
(www.salesforce.com). They can
manage the contacts and the needs that you
can't afford to and probably shouldn't worry about.
Behavior-based marketing is the key. People can say one thing when asked
what they will buy. Tracking their actual purchases brings it into a whole
different light. It is more practical and relevant.
Another advantage of this for a small business is to focus on those
customers that are most profitable. Don't waste your time with those
less-profitable customers who make life difficult for you. Keep them in
the
database but focus your efforts on those that buy more profitable goods from
you.
Your small business can use this as an advantage with technology. You
can't
serve everyone so target those most profitable and resist the urge to deal
with the difficult and less profitable customers just to get a sale today.
Focus on the long-term growth of business.
Terry Brock is an internationally recognized professional speaker,
consultant and author in the fields of business productivity, technology and
marketing. His is a regular columnist for the American City Business
Journals and can be reached at 407-363-0505 or by e-mail at
terry@terrybrock.com.
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