Jump Start Your Marketing Brain. Doug Hall

technical schematics, and perspective on your development pedigree. Empowered with knowledge, influentials will spread the word to others.

      Follow the Historical Thought-Leader Patterns: Research indicates that high-performing salespeople tend to focus their attention on those customers with the ability to influence others. The quickest way to identify the thought leaders among your existing or potential customers is to research when they bought the most recent big innovation in your category. Those who led the last time are the most likely to be the thought leaders with your new offering.

      { 15 }

      SCIENTIFIC

       ADVICE

       FOR FAST PROFIT GROWTH, TARGET FIRST-TIME AND ONE-TIME CUSTOMERS

      A common marketing strategy mistake is to focus all energy on loyal customers. Against conventional wisdom, research finds that on average, loyal customers actually pay a lower mean price than do first-time or one-time customers. Loyal customers often represent a healthy percentage of profits because of the volume of their purchasing. However, on a profit-margin basis, they are often the least profitable customers.

      If you focus 80 to 90 percent of your energy on your loyal customers, the odds are you’ll lose sales and profits. To grow your business, you need to use a portfolio approach to marketing where you invest in the core as well as in helping short-term/one-time customers become loyal customers.

      In most cases at least one-third of sales and profits come from non-loyal customers. This finding is confirmed by two separate studies.

      The Scanner 9000, a data set of 9,804 brands that have been tracked by UPC numbers in grocery stores, mass merchants, and drug stores, found that 62 percent of the average brand’s customers and 34 percent of annual volume came from those who made only one purchase during the year.

      A two-year tracking study of a mail-order catalog found that 47 percent of its customers and some 38 percent of its profits came from short-term, non-loyal customers.

      NET: Not only is growing customers 2.8 times more important than growing loyalty (see Marketing Strategy Advice No. 9), new customers are often MORE PROFITABLE. And first-time customers are also the source of all future loyal customers.

      Many short-term customers are mindless buyers; they’re attracted by a promotional offer or simply an impulse desire to try something else. Our challenge is to be sure they are aware of our Meaningful difference so that they fully notice and appreciate it, thus laying the basis for developing a Meaningful connection with our brand.

      PRACTICAL IDEAS

      Make It Easy for Customers to Impulse Purchase: Make purchasing for new customers as easy as possible. If you have a Web-based business, remove lengthy sign-in processes. If you offer a product or service, streamline paperwork and remove credit checks on small orders. The benefits in increased sales and profits will more than make up for the few losses from fraud.

      Continually Test New Customer Segments: Dedicate a portion of your time and resources to discovering unexpected customer segments and business opportunities. When you do direct-mail programs, test new mailing lists. When you work a trade show, focus extra energy on those who don’t currently buy from you. Place your products in unexpected retail locations and track the resulting reactions.

      Issue Direct Marketing Challenges: Overtly challenge non-buyers to give you a try. Communicate your advantages persuasively through side-by-side demonstrations and testimonials from customers who’ve recently switched to buying your brand.

      Celebrate the Arrival of New Customers: Define special methods for handling new customers’ needs. Provide special instructions, guidance, and help with their “rookie” needs. Warmly welcome them to your brand and your people.

      Create Special New Customer Follow-Up Systems: Have a defined follow-up process to learn your new customers’ satisfactions and dissatisfactions with your product or service experience. Overtly ask for another sale, and if it’s not appropriate at that time, define when in the future you should contact the customer again—then do it.

      { 16 }

      SCIENTIFIC

       ADVICE

       STEALING YOUR COMPETITORS’ CUSTOMERS OFFERS A GREAT OPPORTUNITY IN HEAVILY PRICE-PROMOTED CATEGORIES

      Just as occasional customers represent a significant amount of sales and profits, so too do your competitors’ customers. They can be shifted away from their current choice when provided with a Meaningful difference or when presented with an even easier and more mindless option: a discounted price.

      Mathematical modeling was undertaken on the source of weekly sales increases for various brands of coffee among one hundred households over a two-year period. The results indicated that more than 84 percent of sales increases were due to brand switching (non-current customers switching to the promoted item), 14 percent from purchase acceleration (current customers repurchasing sooner than normal), and 2 percent from stockpiling (current customers buying more than normal at one time).

      Clearly, when an industry is heavily promoted, like the coffee category, a large segment of the population becomes trained to purchase only when the price is reduced.

      The Meaningful Marketing challenge is to find ways to convert the price switchers into deeper and more loyal customers. This requires customers to first notice and then value our Meaningful points of difference.

      PRACTICAL IDEAS

      Be Relentless in Articulating Your Differences: In the face of perpetual discounting, you must become relentless in articulating what makes your product offering unique. Communicate your distinctiveness even when articulating price discounts. Through continuous communication, you will eventually build awareness that your offering delivers value, not just low price. You won’t reduce the need for discounts totally. However, even a small shift can create a big improvement in your bottom-line profits.

      Leverage Customer Purchase Cycles: Understand the purchasing cycles of your customers. Arrange your follow-up e-mail, direct mail, and personal contacts to maximize your chances of making connections just before a new purchase is required. As you’re planning, don’t be shy about directly asking your customers when they anticipate making another purchase.

      Segment Your Offerings for Extreme Differences: Challenge yourself to strip your offering to the absolute lowest possible cost. Consider the unthinkable: Eliminate packaging, options, variations, and “nice” extras. Focus this stripped-down version on those customers motivated by price alone.

      Push your offering to the ultimate in service. Provide added value to those customer segments that value Meaningful differences.

      Use Endorsements to Talk of Differences: Use endorsements to articulate the dramatic differences that customers have experienced as a result of switching to your offering. Better yet, leverage testimonials that speak of the value customers have received from repeated use of your product or service.

      { 17 }

      SCIENTIFIC

       ADVICE

       IF MEGA-GROWTH IS YOUR GOAL, TAP THE FOUR CORE FUTURE GROWTH OPPORTUNITIES—WOMEN, GEEZERS, CHINA, AND INDIA

      The world economy is changing, and trillions of dollars are at stake.

       WOMEN are vastly under-marketed to. Do the math. Women are responsible for 83 percent of consumer purchases, 91 percent of all new homes, 90 percent of cars, and 80 percent of do-it-yourself home projects. Women write 80 percent of all checks and actually own 53 percent of all stock in America!

       GEEZERS or Baby Boomers represent a seismic shift. Do the