Oct
16

Identify Your Target Market, The Secret Ingredient for Referral Success

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Good marketing starts with a clear definition of your target market.  In fact any good marketing text will tell you that it is crucial to identify your target market if you want to be successful in business.  You must know who your target is so that you can craft the best marketing message to adequately convey the value you offer to any potential buyer.  Understanding your target market enables you to design the features or services that you will take to market.  This could include things like price, packaging, distribution and a range of other issues that impact on market share.

Put simply it comes down to three basic facts:

  • Who wants my product or service?
  • Where will they find them?
  • How will I reach these potential buyers with such a compelling message that they will buy what I have to offer?

Doing business by referral revolves around generating referrals that result in closed sales.  In referral marketing the marketing message is always the same.  It all starts with a clearly defined target market.

Why is target market so important?

There are many reasons why target market is so important.  A clearly defined market will enable you to create word of mouth marketing within a specific buying group so that business comes to you.  How do you become known and get people to refer to you?

You could join a business group, trade Association or Club and build relationships with people within that target market.  You could write articles for that target market or offer to serve in a leadership capacity within the Association or Club.  As people in that target market begin to get to know you either personally or by your reputation and they hear good things about the services you provide, they may seek you out and buy from you.

OK, so you understand the power of word of mouth advertising, how do you use that to generate more business?  If you have the luxury of a small target market you can simply create a positive referral based business by doing a great job and relying on the satisfied customers you have to spread the word about you among the rest of that target market.  Sadly we don’t always have small and concentrated target markets like this.

Two very different people attended one of my sessions on referral marketing recently, both wanted to learn how to get more business by referral.  Both worked in the financial planning industry and understood the importance of doing business by referral.  We’ll call them Planner A and Planner B.  We focussed in on target market.  It was easy to identify which financial planner was going to be more successful.

Planner A said their target market was anyone with money to invest and wanted a secure financial future.  Planner B had a very different perspective.  Planner B said they wanted to work with young professionals between the ages of 25 and 35 years of age, preferably couples with no children and clear financial goals.

Planner B wanted to work with people who were clear about their future and because they were in the same age bracket understood the issues and challenges they faced.  Not only that they knew that young professionals often had a habit of spending up big and not saving for the future.  This planner had lived a very basic upbringing and wanted to secure a sound financial future for themselves and was passionate about spreading the word to other young professionals in the same age bracket.  They were very clear on their target market.

Both financial planners were competent however Planner B had targeted young professionals, was more passionate and it literally oozed out of their pores.  Combine that with a clear target market and it was obvious that Planner B was destined for success.  This planner only had to work with a few young professional couples and I predict word would spread fast among the target market, bringing more and more referrals and of course closed business.

Planner A would have to pitch their services to clients everywhere hoping to find someone who will work with them.  They will not have the ability to get referrals from a clearly refined target market like Planner B.  Other than being competent they have little extra to offer to potential clients other than they are a generalist, rather than a specialist financial planner.

The message for business owners and sales people is clear, if you don’t have a clearly defined target market, you must spend time defining one.  With a clearly defined target market you will create a steady stream of referral business.

© Lindsay Adams 2013.  All rights reserved.

Article written by the Lindsay Adams National Director of the Referral Institue

Lindsay Adams National Director, Referral Institute The Referral Institute is a training and consulting company that specializes in working with business owners and sales people to help them develop referral their marketing vision, plans and goals, before they go to BNI to take action.  Find out more at www.referralinstitute.com.au or email Lindsay directly at Lindsay.adams@referralinstitute.com.au 

 

Categories : BNI Fundamentals

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