Identifying Your Target Market
When I started my sales career, my philosophy was to let anyone who needed my product buy from me. It worked. I was one of the more successful young salespeople and I exceeded my quota month after month. My target market was “anyone and everyone”, and it seemed to be working. However, I was unknowingly limiting my future success.
After hearing from several of peers who had been in sales for years that they wish they could start over and not have the bottom 10-20% of their book of business, I conducted research on my book of business. My research showed that 75% of my time was spent on customer service issues with only 15% of my clients. Furthermore, looking at who that 15% were, the study found that 75% of those were my lowest yielding profit margin clients. In addition to my failed attempts at asking for referrals to anyone, it was obvious that I needed to invest in identifying and focusing my sales efforts on my target market. Learn how CAN helped the Admissions department at a University focus on recruiting the right students.
Once I identified my target, two things happened: I started to receive referrals when I asked for them, and I was finally able to apply a strategy to my sales efforts. I no longer felt that I had to get everyone as a client, in fact, I started turning away people who were not my target market. Low and behold, gone were the price chasers, time wasters, and no-money makers that wasted so much time.
I used the following strategy to identify my target market, so that I could start selling smart:
First, I identified the events that caused someone to buy my product.
In my case it was a major life change. Things like buying a new home, getting married, having children, and changing jobs.
Second, I identified the characteristics of the people were that were experiencing these events.
In my case it was 20-30 year olds that had graduated college, had lived in apartments for 4 to 5 years, had a job were they made $50,000 or more a year, and had met their fiancés but had yet to marry them.
Third, I identified where my target market spends time.
In my case, my target market spent time at first time home buyer classes, professional certification training classes, marriage classes, gyms, and trendy restaurants. This provided my advertising with focus, also I started to have meetings and work at coffee shops and restaurants where I could meet my target market.
Lastly, I identified the people who were around people who needed my product.
In my case, these were real estate agents, mortgage brokers, ministers, trendy restaurant owners, lawyers, and headhunters. This step allowed me to know where I needed to spend my time networking and which events I needed to attend. All of a sudden I knew where I needed to be and who I needed to meet at each event.
Now when people are outside my target market, I can recognize when they might be one of the bottom 15% of my market that would suck up 75% of my customer service time. I can weigh the cost and benefit and decide if I should bring them on as a client, or refer them to someone who might be able to serve their needs better.
Let me know if you would like help identifying your target market, or using predictive analytics to find people who fit your profile and are looking to purchase.
Learn more about how CAN helped a online university identify their target market.