Larry’s Column

Your customers and prospects are not all the same yet many businesses market to them all as if they were all alike. Some are young; others are old. Some are wealthy; others are poor. Some have lots of children; others are childless. Some buy your products and services frequently; others purchase rarely. Some buy a broad spectrum of the things you sell; others just purchase a limited selection. Some have high potential for purchasing more from you; others have no additional potential. Obviously they are not the same so, if you want to gain a higher return on your marketing investment, don’t treat them the same. Segment them and market differently to each segment.

There are many ways of doing this but for purposes of this exercise and the space limits of this column let’s start with those wonderful people who are your current customers and segment them into appropriate groups. Obviously each industry and each business within each industry are different so this information, by necessity, is very generic but take this thought process and modify it to fit your situation. You can segment these customers by sales volume or frequency of their purchases or both volume and frequency. Secondly rank the customers within each segment by the amount of potential future business they represent. Some are buying the maximum they can purchase from you; others only purchase a small percentage of their needs from you so put them into the high potential segment.

Certainly you don’t ever want to lose a high volume customer so you will want to always be keeping in touch with them and building the relationship but, if they are purchasing their full potential, there is no need to be investing your promotional budget with them. Use your promotional budget on those who have the need or desire for your products and services so they will buy more from you.

Segmented promotion can be a powerful tool for most businesses. It takes analysis of your sales and customer data to know your customers and discover their preferences to find those with the most potential to help you grow your business.

Email Larry Galler on Larry@larrygaller.com