A story about South Australian wines and Fijian holidays to test the market and attract leads…
There are a few basic but very important frameworks on which successful marketing is built.
So simple that they are often overlooked and neglected by both business owners and by marketing practitioners.
The most fundamental one is the definition of a customer:
A customer for your products and services is everyone who meets all three conditions:
Is prepared and happy to pay the money you ask for your product and service (at full, not discounted value)
Has the need and/or want for your product and service
Is ready to buy your product and service
If the people you are marketing to and attracting to your business via your promotional efforts do not meet all three conditions ask yourself this qustion – who are you attracting? Leads or window shoppers?
Look at the table below for the answer:
As you can see from the table, selling to customers (who are ready to buy now) is easy.
Attracting leads to your business, however, is a strategic move as they meet only 2 of the 3 customer criteria.
You need a program/a pathway for them, which will turn their need for your products and services into a want and will increase their readiness to buy.
As for the window shoppers ….nothing about them is certain – you don’t know if they have the money/budget to pay the full price of your products or services.
You don’t know if they even have a need or want for your specific products and services.
And you don’t know how far from ready to buy they are at the time they come to your business to window shop.
So what is the big deal with it? Why is window shopping bad?
It is not, if you just let it happen – in a way similar to having a shop on a busy retail street.
But it is not OK if you are actually paying to attract window shoppers and worse even if you are buildign a business around window shoppers.
It does happen.
This is how.
Many years ago, when I was consulting start-up businesses in Adelaide, many of these entrepreneurs were putting their family savings in a business whose future chance of success was based on the opinion of these very same family members or friends.
They had done market research of their potential market and had assessed the viability of their business idea by asking their family and friends if they liked their new product and services.
What do you think your loved ones are likely to say in a similar situation?
“No, this sucks”? Hardly…
Even if your friends are completely honest with you, you still have to assess the relevancy of their answers in light of your target market – who your target customers are, what they need and want and can they pay the asking price.
Even if they ticked all these boxes their answers are still no guarantee for success.
For example, one of my clients, a very talented jewellery designer, organised an exceptionally inviting and well received exhibition of her new designs.
It was all set up in a nice heritage building with delicious nibbles and of course a wonderful selection of the famous South Australian wines.
Now do you think the guests were slightly influenced by the setting of the “retail” environment?
There’s nothing wrong with this setting, provided your marketing strategy involves creating a similar enhanced customer experience and selling the products to select retailers who would replicate this experience for their customers.
Any other distribution strategy, not replicating the buying experience provided in the market research, would not likely succeed at the pricing points tested at the exhibition…Pricing points? What pricing points?
Oh, forgot to mention that no prices were displayed at the exhibition.
So the very important condition of whether the guests were ready and happy to pay the asking price, which would make them potential customers for the artist’s jewelery was not tested.
Designers and artists in general are sensitive at selling and find it hard to attach commercial value to their art.
I understand this but business is business.
Unless you see clearly the relationship between the price and the product you cannot identify your target customer base and would therefore struggle to market your business successfully.
Coming to present days…
I see a lot of promotional methods on social media centred around free competitions.
A recent one was specifically designed for brokers to help them attract new leads by offering them free holidays to Fiji.
This marketing company was very proud to announce the hundreds of leads it scored for these mortgage brokers.
The obvious questions is – as a mortgage broker do you see a clear link between the desire (need and want) for an overseas holiday and the desire (need and want) to buy a house? Do we assume that because people want a free holiday they can’t afford a paid one? And that the reason they can’t afford a paid one is because they are saving for a house, therefore they may be in the market for a house soon-ish? So this all qualifies them as a viable lead for our business?
Growing a database of non-qualified “leads” is not a good marketing practice. It certainly is an interesting and appealing promotional method but what you are most likely paying for is for a database of window shoppers, not leads and would be customers.
So think about who you want to attract to your business before you go ahead and invest in the process of attracting them.
Think about your long-term marketing strategy first before you invest in a short-term promotinal activity.
Marketing comes first!
If you would like to discuss any of the points raised in this article contact us here
Denitza Genova, Marketing and Service Strategist at Sparcus Group. Denitza helps service businesses simplify and organise their marketing, sales and service activities into an efficient and profitable system, which does not require high marketing and sales expertise from the business owner. It drives the most value and money to your business and prevents you from investing in marketing fads or in unprofitable product or markets. To see how this could work in your business book a call with Denitza here.