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Decision processes vary by individual, thus strengthening the notion that there is no "general public" and that mass advertising is really a game of marketing roulette whereby companies randomly throw out marketing messages and hope they hit a target. Businesses need to learn what physical needs and emotions and lifestyle factors drive their customers' decision processes when making product choices and assigning brand loyalties. Demographics do not give us these answers. When you truly understand why customers make the choices they do, you can market effectively and efficiently.
Following are some critical steps for getting to know your best customers and communicating relevantly.
Clearly, capturing the lifetime value of every customer that calls on your business is neither realistic nor appropriate. You must focus your valuable resources on the customers that represent the greatest return based upon their history with you. Typically the customers most likely to do business with you again are:
After determining who your best customers are, you will need to identify dominant traits beyond product selection among customers, and sort individuals into groups with similar traits and purchasing behavior. Your groups might represent dominant product usages, emotions or attitudes among multiple customers. You will then need to develop comprehensive profiles for these groups so that you can send "personalized" messages to several customers simultaneously and still maintain a high level of relevancy.
Understanding where customers fall into these categories will help you prioritize your marketing efforts and fine tune your messages.
Demographics: This covers age, gender, marital status, race, income, education.
Geodemographics: These are the influences that are unique to customers' geographical areas. Although all your customers may live in the U.S., those from the South vs. the West vs. the East have different traditions, values, and ways of doing things, all of which influence purchase processes and brand choices.
Consumer orientation: This refers to a customer's personal psychology, attitudes, behaviors, and decision–making patterns that have evolved from his or her social environment, upbringing, insecurities, and confidences. The VALSTM network (www.sric–bi.com) defines consumer orientations according to various values such as control or freedom; tradition or novelty; information or stimulation; hands–on activities or intellectual abstraction; and a consumer's level of resources and personal innovation.
Generational influences: Are your customers baby boomers, elderly seniors, Generation Xers, or teenagers? Every generation has a unique set of circumstances and attitudes that affects decision–making and brand expectations.
Category cycle: What is the usage pattern of your most valued customers? Are they new and frequent users, such as first–time moms, or seasoned less frequent users, such as grandparents?
Market adaptation: Where do your customers fall in terms of readiness for your product category? Marketing veteran, Regis McKenna, identifies consumers as either Innovators who are willing to experiment with new products first; Early Adapters, who are willing to try new products with some risk; Late Adapters, who wait to purchase something after it is proven; and Laggards, who only purchase when there is an absolute need or extreme pressure. Identify where your customers are and find ways to move them up the channel of product readiness.
Don't stop after you have sorted your customers into broad categories. Keep drilling down to specific attitudes and behaviors linked to purchasing behavior. Doing this will enable you to further personalize your messages and strengthen customer relationships. For example, if you operate a pet supply business, you can easily classify your customers according to physical traits such as dog owner, cat owner, reptile owner, bird owner, or fish owner. You can further segment these categories according to purchase–related emotions. For example, dog owners can be segmented according to customers that believe:
About the author: Jeanette Maw McMurtry is the author of "Big Business Marketing for Small Business Budgets" (McGraw–Hill 2003) upon which the above article is based, and Principal of The McMurtry Group which consults both large and small businesses on how to affordably capture customers' lifetime value. For more information about The McMurtry Group, or to review or purchase the book, visit www.mcmurtrygroup.com or email firstname.lastname@example.org.
Excerpt from Big Business Marketing for Small Business Budgets. McGraw–Hill. © 2003.