Your market is made up of all the people who have done business with you, along with the people who have some likelihood of doing business with you. Everyone in business has at list minimal understanding of their market, but do you really understand yours?
Many start-up B2C companies and salespeople target people with lots of money, but these people are possibly only members of their imaginary market. People with lots of can't and won't buy every product or service out there, nor will they buy from every salesperson in the world.
One reason people lots of money is because those people don't spend it. If you're looking for prospects who will spend money with you, it doesn't necessarily mean you should look first at individuals who have lots of money. Sometimes, it's better to focus on other market segments.
When I was selling furniture and interior design related products, I can't tell you the number of big, beautiful homes I visited that didn't have any furniture. At the time in the Twin Cities, a $500,000 or $800,000 house was quite large and usually quite nice. But why didn't they have any living room furniture, or a dining table?
The answer is they either couldn't afford it (all the money was tied up in their home), or they could afford it but chose not to. After all, dining tables don't usually appreciate in value whereas real estate usually does over the long term.
Sometimes my best customers, even though I was selling what was perceived as upscale products for upscale companies, were average middle-class or families who wanted to revel in owning a beautiful piece of art or a beautiful console table for their living room. For these customers, owning these items made them feel rich even though they weren't.
Some businesses conjure up imaginary reasons why their customers buy from them. "They like our quality," the owner may say in a sales meeting. These imaginary assumptions can lead sales teams in the wrong direction by going after the wrong types of prospects.
But further investigation may reveal that the reason people buy from them is because they're located in real estate that is easily accessible by their market, for example, retired people who live in the nearby senior living facilities surrounding the company's showroom.
Collect data from front line sales reps, do market research, survey your customers who bought and those who didn't. Constantly work to refine and develop your understanding of your market. When you do, you're getting closer to key information that can have a significant impact on your business success.
If you like this post (or don't) please click on "comments" below and share your comment. Skip Anderson is the Founder and President of Selling to Consumers Sales Training. He works with companies and individuals who sell to consumers in B2C, retail, in-home selling, in the financial, real estate, and insurance markets, and other consumer-selling industries.
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These are some great observations, Skip. I am surprised more and more by business that simply "is." Without any real analysis or consideration given to factors such as these, it just is. I imagine that even taking a stab at attaining this information can give some direction to the entire process, whether B2C or B2B.
Posted by: Dave Macdonald | 16 November 2009 at 05:46 PM