Finding prospects who most want, are most able, and are most likely ready to buy.
Target Marketing Defined
A definition for target marketing is: Those prospects you most want to become customers, and who you have identified to be the most able, likely and ready to buy your products and services.
These are the people to whom companies direct their marketing messages, creative energy and media buying dollars.
Narrow Segments
The central idea of target marketing is to define more narrow segments to pursue. More than 9 out of 10 senior marketers say their digital marketing is sub-optimized. The big problem for marketers today is that they are still creating marketing campaigns targeted to too broad an audience.
Marketers know well that the days of reaching large swaths of the buying public from one channel (network TV or business magazine) are long gone.
However, marketers still struggle with how to reach a more diverse and heterogeneous audience. They are overwhelmed by the channels available and lack true insight as to which messages and channels deliver the best conversion rates and overall ROI.
Expectations of Personalization
More than 90% of consumers expect personalized user experiences, but they get it less than 30% of the time. Think about your own experiences with platforms like Amazon and Netflix. You are constantly offered personalized, curated choices. This is how you gain attention and win customers. But marketers, especially B2B marketers, find it difficult to deliver compelling, personalized marketing.
The good news is it is possible for businesses of any size to create an effective target marketing effort and challenge larger competitors… if they have the right elements in place.
Key Elements of a Target Marketing Model
A target marketing model develops, defines and articulates “above the funnel” selections you will make in finding the best prospects.
Ideal Customer Profile (ICP)
Before you begin to find prospects who are outside of your sales processes — or sales funnel — you want to first investigate existing customers and establish an Ideal Customer Profile or “ICP.” An ICP will help you with targeting prospects.
- Define Your ICP – Your first step is to compile data and insights on your current customers. Who has already purchased your products and services? Why did they buy? What are the characteristics they share?
- ICP Insight – Create an ICP based on modeling your best customer insight to find and define individuals with the highest propensity to buy. One of the metrics to establish your best customers is their Customer Lifetime Value or CLV. The CLV is the total amount of money they will spend with you
- Find and Reach ICP – Blend your ICP data with an understanding of the Total Addressable Market.
Total Addressable Market
Ideal Prospect Profile (PPP)
The ICP is one segment of the Total Addressable Market or “TAM” for your product and service.
Total Addressable Market is the revenue opportunity available for your products and services. TAM is also the number of individuals that have a propensity to buy your products and services.
Your Ideal Prospect Profile are the people you need to target and convert to a customer. How do you define your Ideal Prospect? Traditionally there are five areas to research: Demographic, Geographic, Psychographic, Behavioral Variables and RFM or Recency, Frequency, Monetary Value.
Note that people with similar demographic and psychographic traits tend to leave near one another be it certain regions, states, counties, urban, suburban, rural, etc. Different geographic segments have different consumption patterns, too.
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Target Marketing in Overall Marketing Strategy
Defining your target market also factors into your overall Marketing Strategy, Go to Market Planning, Communications, Messaging, your Product/Market fit and alignment, Product Marketing Management and Demand Generation.
Your target marketing model will also inform your sales strategy, including buyer personas, sales playbooks, and customer support management.
Target Marketing Examples
If you can define your target market very narrowly or in niches, your likelihood of reaching those prospects with your marketing messages increases dramatically.
Your first marketing steps will be more impactful if you can identify prospects with specificity.
You want to move beyond general statements like: “Our target market is [men] aged 35-50, who are [college educated], live in the [Northeast] and like to [take golf vacations].
There needs to be more of a narrative that gets to interests, tensions, desires and fears.
Target Marketing Statements
Here is a target marketing statement for a B2B buyer:
”We want to reach purchasing managers at small, privately-held, California-based manufacturers. These manufacturers make farming equipment for the Noncitrus Fruit Farming industry. Our targets have facilities within a 25 mile radius of Bakersfield, California.”
At this level of detail, you have identified:
- Target/Decision makers – You defined as “purchasing managers”
- Business product or service – “farming equipment manufacturers”
- Size – “small, privately-held”
- Industry or Vertical they serve – Noncitrus Fruit Farming industry. There is even a database classification for this type of industry known as the North American Industry Classification System or NAICS: 111339 (for noncitrus fruit farming).
- Region – “within 25 mile radius of Bakersfield, California”. Again, for database services, you can access the Bakersfield MSA or Metropolitan Service Area and see lists of companies in that region.
There are infinite details to add and make your target marketing richer, such as “How old is their current equipment?” “What are growth trend data for them, the industry and their customers?” “Are there tax / depreciation benefits or incentives for manufacturers?”
For a business or professional services buyer there needs to be more of a narrative that captures demographics, geographic and psychographics in a way that gets to interests, tensions, desires, goals and fears.
For example:
Robert and Ellen Block are seeking someone to manage their investments and provide financial planning. Robert has recently retired from his career as a vice president for a large corporation. Ellen did not work outside the home, instead raising their only child Chelsea, and then Chelsea’s son, Mike.
They recently sold their home in Chicago and moved to Maine. As they enter into retirement, they would like to maintain their current lifestyle, spending their time between their homes in Maine and Florida. They are concerned about running out of money, because they both expect to live to age 90. Also, they don’t want to take too much investment risk. Finally, they hate paying income taxes, and would like to reduce their income taxes, if possible. Finally, they would like to be debt free.
This description contains all the elements necessary to touch each of the profiling areas, along with an understanding of needs, desires and triggering events.
Also, you will use your Ideal Customer Prospect profiling and develop customer segments to further define your offerings.
Should I Have More than One Target Market?
How to Begin Target Marketing?
Should you have more than one target market? The short answer is Yes.
Customer segmentation subdivides a market into customer groups with shared characteristics. In our example above, we have retirees.
But what about business owners without children who are facing a liquidity event? What about middle aged parents who are about to send kids to college? What about a 60-year-old woman who just inherited assets from her deceased mother?
Having multiple target markets will help marketers dive more deeply into the most responsive and profitable segments. You will also see which customers are underserved and how you can match your competitive advantages to the needs of prospect segments.
Many marketing agencies and consultants can go through a number of targeting exercises. However, there is another strata of marketing skill, talent or experience that is rare. According to a study by Whittier and Morgan, the pool of executives with a strong brand, and deep digital marketing skills, especially with data/Technology expertise, is severely limited.
Three Core Competencies to Look for in a Target Marketing Executive or Agency
There are three core competencies to look for in a target marketing executive, consultant or agency. They are: (1) predictive modeling, (2) martech stack creation, and (3) content personalization at scale.
When the CEO, CMO or executive team can access these competencies in an agency or consultant, they will then be fully equipped to change marketing in three ways.
First, marketing will need to shift their organizational structure to an agile ecosystem of internal and external partners.
Second, they must scale personalized content through predictive modeling.
And third, they need to build out a best-in-class martech stack with an open architecture that is future-friendly due to its Lego approach to connectivity.
Applications of Target Marketing
The following are case studies in which TechCXO has applied target marketing:
- Digital Transformation – Completely transform a company’s enterprise and MarTech architecture enabling significantly more personalized user experience
- MarTech Optimization – Reconfigure a client’s MarTech stack and deploy a Customer Data Platform (CDP)… right content getting to the right individual at the right time: more than 30% increase versus control test.
- Personalized User Experience Optimization – Best-in-class, first-party data usage strategy. Increased personalized user experience by more than 10x.
- Shopper Marketing Transformation – Transformed shopper marketing from solely in-store focused to an out-of-store and in-store approach, including e-Commerce. Delivered best practices across multiple mediums and channels targeting each store’s trade radius and in-store activation. Double-digit sales increase.
- E-commerce Optimization – Created a best-in-class e-Commerce ecosystem, for more than 50 million visitors and over $100 million in sales. Developed new analytics capabilities to measure consumer LTV by key segments and channels including online and offline.
- Digital Marketing Transformation – Switched a company from programmatic advertising driven by third party data to a digital marketing approach targeting individuals with email, search, and retargeting fueled by first-party data resulting in a 5x increase in sales.
- Data Analytics Optimization – Deployed an uplift data modeling methodology that combines the modeling of market opportunity, audience segmentation and big data analytics with attribution and marketing mix modeling to identify ideal individuals from first-party consumer databases.
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