Marketing To Ideal Customers: What Every Small Business Should Know About Direct Mail
Not all customers are ideal customers. The truth is there are customers who are costing you time and money. There are other customers that are profitable. When making the decision on where to spend marketing dollars, to the extent possible, you want to focus on contacts that fit the ideal customer profile.
Direct mail marketing??? Are you kidding me? Surely digital marketing via social media, email and video marketing is better? No. not necessarily.
In an age of social media, video marketing and email I am still a big fan of direct mail, especially if your target market is an older more affluent customer or your product is B2B focused. I built an online continuing education startup solely on postcard mailouts because I knew that my company prospects were:
- very easy to target
- didn’t respond well to social media.
Several thousand postcards and 10 years later, I sold that company and went on sabbatical for 5 years and am living the life of my dreams.
Direct mail advertising did that and if I had to build an online startup like that again, I’d go back to peeling and sticking postage stamps and labels at the dining room table.
There are other reasons why direct mail is better than digital marketing options, of course, but you’ve got to accept that marketing is an investment. So make the smartest investment and look to attract customers who value your products, services and expertise first. These are the customers who do repeat business with you. These are the customers who readily refer your business.
One of the pitfalls of trying to be all things to all people is that when you talk about your business, the message has to work with the lowest common denominator. As a result your message becomes vague and generic, failing to capture the imagination of anyone. You want a message that resonates with particular clarity to the recipient. The message tells them that you understand them and can deliver what they need.
Unfortunately the fear among many struggling small business owners is that if they don’t cast the net far and wide, they may not get any inquiries from their marketing. I’ve seen people invest in large campaigns thinking that if they only get a fraction of a percent response, at least they will get something. It rarely works that way or it only serves to attract unqualified prospects that are not a fit for your products and services.
Marketing Reality: It is better to market to 100 qualified prospects 10 times, than 1,000 unqualified potential customers once.
Remember you have to develop credibility with this group. Right now they don’t know you. The quickest path to credibility is an ongoing campaign where you build their trust by demonstrating you understand what they need. It’s going to take more than one attempt to communicate this message which is why marketing to large diverse lists is a waste of money. You can’t afford to market to the unqualified. By focusing on the qualified, the list will become smaller and allow frequent outreach. When that ideal customer visits your website or takes that call from you, you will be better positioned for a meaningful discussion with much greater odds of closing the business.
How do you identify your ideal customers? First and foremost they value you. They are not beating up on your staff. They do repeat business. They refer business to you. Make a list of those people. Are there characteristics that they share? Some of these characteristics may be traditional marketing demographics:
- zip code,
- SIC code,
- number of employees,
- years in business, etc.
Look for more subtle characteristics as well. To give you an example: I a founder of a nonprofit organization whose mission is to educate the public about invasive lionfish in the Western Atlantic Ocean, rally scuba divers to hunt them and organize lionfish hunting derbies while showcasing them as incredibly edible. I didn’t have a multi-million dollar budget, in fact my budget was about ZERO. The entire startup was going to be funded out of my own pocket but I knew that social media marketing and direct mail was our best option to gain traction quickly. So I ordered a list of certified scuba divers and paired that list to about 2,000 by targeting those who lived in states that were affected by lionfish. Then, based on interviews with my own best scuba diving clients, I was able to identify some subtle differentiators. My ideal customers were divers who had traveled outside of the United States to other areas in the Caribbean that were being badly affected by this invasive species. Those two characteristics dropped my list down to about 1,800 prospects. I further segmented the list by individual states which resulted in much smaller lists of between 100 and 400 contacts each and allowed me to be more strategic about my mailouts based on the press lionfish were receiving and whether or not other education or lionfish hunting programs were scheduled there.
I tested a small segment of each type of list. Both the small targeted lists and larger diverse list received monthly mailings for 3 months. The smaller targeted lists had response rates of 12 – 30%. The larger lists had response rates in the single digits, with much lower conversion rates.
The message to the smaller lists had the advantage of being more relevant to the recipient – it was all about them and the challenges in their own backyard. By writing about the particular problems facing these more targeted groups, and more quickly gained credibility with the recipient. Marketing to the larger did not allow the more potent messaging. I had to use more generic language, more generalized scenarios.
The result was that I built a multi-national ocean conservation organization with about 8,000 active members in less than a year and it started with funding I was able to generate based on postcards and a facebook page. Direct mail works when applied properly.
Don’t be afraid of a small list. It’s a starting point that will allow you to be memorable, valuable and frequent with your marketing. Once you have identified the ideal future customer, it is a much easier exercise to proceed to the next step, which is
“Where do I find more people like this?
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