This One Key Will Make Or Break Your Business

Before you spend one dollar, before you create your offer, before you decide on what media to use and before you write even one word of your ad, email or letter, you must understand your customer.

The industry refers to this as your TARGET MARKET or DEMOGRAPHIC. It might sound all very technical, but stick with me - this would have to be one of THE most important areas of your business that you MUST get right.

Who is buying from you? And please - don't be fooled by thinking it's 'everyone'. This is simply not true.

Start keeping records of who buys from you. Once you have a few weeks of results go through them and work out which one person best describes your ideal customer. Write down as much as you can about that person. Age, Sex, Suburb, Marital Status, Kids, Income, Work, Likes, Dislikes and so on.

You'll find that 80% of your business comes from 20% of your customers. Find out who that 20% is. Don't focus on the bulk of your customers. Focus on who you want that will produce the income you need. This is your target market.

Once you know who your target market is, you can focus all your efforts trying to reach more like them, rather than reaching 'everyone'.

Any money you spend on advertising before you know this is wasted! Let me show you what I mean with this illustration;

Think of trying to shoot a tin can off a pole. The best solution is aim a rifle with the right ammunition and shoot. If you're a good shot, you'll knock the can off the pole with one attempt. Many people also use the shotgun approach. A shotgun blasts many little bits in a much wider area, hoping one of the little bits will hit.

It's much the same way in advertising.

A lot of people are persuaded by mass media reps to give this 'shotgun' approach a go. Sure, this approach does reach a lot more people (which can be a good thing if that's what you want) but you end up paying for the full reach, even if they aren't all your potential customers. You end up paying to reach people who are NOT your ideal customer as well.

If you decide to go down the mass media 'shotgun' path, you need to look at the cost a little differently than you may have in the past. Ask your mass media rep to help you work out what you will pay to reach 'only your potential customers' - then compare this real cost with other mass media (you might be surprised how much it's actually costing you).

Here's what happens. What they need to give you is the numbers of people watching or reading their media who fit into your 'target market' category. For example you may be told that 1,000,000 people read the general newspaper and a small ad may cost you $1000. When you ask the question about your target market, you may find that only 200,000 of you target market read this paper. So now it's costing you $1000 to reach 200,000 people.

The next thing to consider is WHERE your customers come from. There's very little point advertising to the whole state when 80% of your money comes from customers that live within 5 minutes walk from you.

So in the above example, the 200,000 people in that mass media may reduce down to 20,000 people that live within 5 minutes walk from you. So now you're paying $1000 for 20,000 people who are your target market.

Some media may not be able to break down to this level, but some can, so it's worth asking.

Do the same exercise with each mass media you want to look at advertising with. DO NOT look at their total audience figures because you don't care about their total audience.

Then consider this: a 'bit' from a shotgun hits the target with less force than a single focused rifle shot, so in most cases you will need to hit your target many times to make your impact. Be prepared to advertise in the same medium at least 3 times if it's a newspaper or magazine or at least 30 times in a week if it's radio or TV.

But don't get me wrong. I'm not saying mass media is bad. In fact it's a very powerful media if used correctly. What I am saying is that if you have a small budget, you really want to focus in on who your ideal customer is and find what they watch, what they read, what they listen to and where they go. Then measure carefully what it costs to reach them.

You may find a more direct approach - something which is more personalized and measurable like direct mail, email, SMS - has a lot more impact for a lot less money.

The more you can fine tune who your target market is, the more cost effective your advertising and marketing will be and the more leads and sales you'll make. Knowing who your target market is will not only help reduce the amount of money you need to spend on advertising, but it will also help you streamline your product selection and your entire business focus.

Good luck with your next ad campaign.