How to Own Up & Cut Down on Your Marketing Spend

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There are two types of budget cuts: the ones you have an obvious reason to make and the ones you’re afraid to make. “Obvious reasons” might include the cash crunch your company is facing, for example. But if you’re a growing startup with cash at hand, and you still don’t often think about reallocating or making budget cuts, you may be allowing surplus and unnecessary cash burn to creep in.

Then, if you let this excess spending go on too long, you might lower your growth potential and make it harder to attract funding or outlast the competition.

Marketing is all about leverage, so spending money is important. But you need to have more gut than glut to grow a business. You need to own up to your marketing spend, and that requires “defending” every dollar to yourself before you can “defend” it to your company. You also need to think about revenue growth across the whole organization.

And sometimes that means prioritizing and cutting your own spending so the company can invest cash in initiatives with the highest and most predictable ROI across the company.

So, whether you’re facing an immediate cash shortage or trying to get leaner, to extend your company’s runway and ROI, here’s a six-step process I’ve used and recommend, for identifying excess and pruning your marketing budget while staying on the path to growth.

1. Test a performance indicator.

Start by choosing one important key performance indicator (KPI) directly tied to revenue, to evaluate against your spending. For example, you could choose the number of website visitors, qualified sales leads or in-store coupon redemptions. Then, repeat the process as many times as you want to evaluate your spending against multiple KPIs.

2. Make two lists.

Make two lists labeled D and I, for “direct” and “indirect,” and choose a specific time period. I prefer to use a three-month period. Include in list D all spending during your chosen time period that directly and measurably has impacted your KPI, and include in list I all spending that indirectly or indeterminately has impacted your KPI.

You can include time spent by people, or hard dollars, or both. For example, you might include in list D your spending on search engine marketing or promotional emails that are tracked all the way through to your KPI. List I might include spending on a new video or updating the look and feel of your current website.

3. Do the math.

Add up the total KPIs achieved from list D spending during your chosen time period, and assign them to list D. You should know the number of KPIs that came directly from the spending in list D, because by definition, list D will be directly measurable and tied to your KPI. If your list D marketing spend impacts your KPI in a future period instead of the current period, make sure you use the same future period, when you add up the KPIs from list D and from list I in the next step.

4. Do the math, Part II.

Add up the total KPIs achieved from list I spending by subtracting the KPIs in list D from all KPIs achieved in your chosen period. For example, if you had a total of 100,000 new website visitors during your chosen period, and 55,000 came from spending in list D, you would assign 55,000 KPIs to list D and 45,000 to list I.

5. Do the math, Part III.

Calculate the cost-per-KPI for both lists by dividing the total spending in each list by the total KPIs achieved from the spending in each list.

6. Reallocate, if necessary.

Consider reallocating or cutting back on your spending in list I if the cost per KPI on that list is higher than the cost per KPI in list D. If you’re not sure exactly how much or where to cut, begin testing reduced portions of your list I spending in isolation against the benchmark in your list D spending. That way, you’ll only be spending the minimum amount of money necessary to prove out your indirect spending decisions.

This six-step process is oversimplified and assumes you’re always optimizing your direct and measurable spending against your KPIs. It also assumes that some portion of your marketing spend is hard to measure in terms of direct impact.

Keep in mind, however, that our increasingly connected world means fewer excuses for not measuring the direct impact of your marketing spend on key metrics. Make sure you always prioritize spending on measurement and analytics so you eliminate as many blind spots as possible. Remember: You can’t manage what you can’t measure.

Source: John Arnold in Entrepreneur magazine

Complete Media Inc is a Sioux Falls marketing, advertising, website design and web hosting company specializing in web design, maintenance and hosting services.

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Tracking Return on Investment in Your Marketing

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When assessing the effectiveness of any marketing campaign, you will need to consider the concept of return on investment. Return on investment (ROI) refers to the measurement of how much benefit (or return) you get from the marketing actions you take. A high return on investment means that you received more back than what you invested. This is the most desirable outcome.

No matter if you’ve never really thought about return on investment so far, you can start today, right now, and figure out how your marketing campaigns are performing. There are just three variables you will need to know when trying to determine your ROI for any given campaign or action.

You’ll need to know:

  • The cost of the marketing effort
  • The number of visitors or results brought in due to the marketing effort
  • The number of conversions made in that campaign

With just these three pieces of information, you can easily determine your ROI simply by dividing the value of your conversions by the costs of the marketing efforts.

The math on this is as follows:
Return on investment = (Gross Profit – Marketing Investment) / (Marketing Investment) x 100

In English, that’s the value of Gross Profit minus Marketing Investment Divided by the Cost of the Marketing Investment multiplied by 100.

So if you made $2000, but spent $1000, your ROI is: $2000-$1000/$1000 = 1 x 100 = 100%

This would be a type of campaign you’d consider running again.
If, on the other hand, your numbers showed that you made $500, but spent $1000, your ROI would be: ($500-$1000)/$1000 = .5 x 100 = 50%

This would NOT be a campaign you’d consider running again- because you are losing money.

It’s important to recognize that not all conversions may be immediately monetary. For example, you sometimes will calculate conversions by action taken, such as someone signing up to your newsletter, even if no money was made from that action. But you can calculate your cost of acquisition by determining the cost of getting that person to sign up.

If you spend $100 and get 100 new subscribers, your cost of acquisition is $1 per person. If each person goes on to spend $100 dollars with you in the future, you can see that you’re spending $1 to make $100. That would be worth continuing.

While this is math, it’s not too difficult- and just because it’s math isn’t the reason to avoid determining these calculations in your business. Knowing your numbers in this way can mean the difference between working really hard, and never being sure if you’re being successful, and working hard, but knowing you are.

In order to know if your marketing efforts are worth continuing, you need to know how they are returning for you. You can select just a few key metrics to keep track of, but be sure to track these regularly.

Understand what represents progress and success in your business, so you know if what you’re doing is actually working. When you find something that works, then invest more time and energy in improving it for better results. Finally, and most importantly, share this data with frontline and key employees. If they are aware and even given the opportunity to have skin in the game, the value of tracking and accountability becomes all the more crucial in the continuing success of your business.

Source: Rachna Jain

Complete Media Inc is a Sioux Falls marketing, advertising, website design and web hosting company specializing in web design, maintenance and hosting services.

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What is the value of a lead?

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Every firm needs customers, and every customer begins as a lead. So leads are fundamental to business success. But too many executives don’t understand what leads are, or how to value them well enough to make smart investment decisions.

Leads are blocks of information connecting seller and prospect. Unless your business makes all its sales during a first inbound contact, you are going to have leads. But how you handle them—that’s where the profit lies.

Leads are valuable. Firms invest a lot of money generating or buying them. But what should you pay for a lead? What is the price at which are you equally willing to purchase the lead or let it go to a competitor? Sales and marketing managers must understand a lead’s value to avoid over-paying or under-buying sales leads.

Several approaches to lead value calculation are available, based on your firm’s primary sales objective. Are you going for growth, market share, or profit? Your answer to this question will influence not only how you pursue sales, but also how to evaluate your sales leads.

Companies Going for Growth

Growth firms typically set their growth strategies by planning to generate a fixed number of sales. For example, a 1,000-customer firm targeting 30% growth wants 1,300 customers. Adding a few hundred to account for lost sales or cancellations, this firm may determine that it should try to acquire 500 new customers in the period.
To back your way into the number of leads required, divide the number of new customers by your close rate. If this hypothetical 500 new customer firm has a close rate of 10%, they need 5,000 leads. The marketing department’s mission is to acquire them at the lowest possible cost. The value of a lead to this firm is the next highest price from any alternate lead source until the 5,000 lead target is met, and then zero once the full 5,000 leads are purchased. In short, the value of a lead for a growth firm is a step function: The lead value is very high until the growth target is reached, and zero thereafter.

When Your Objective is Market Share

Market share oriented firms are looking for their slice of the industry; it’s not a fixed number of new customers. They will approach leads similarly to a growth-guided firm, but the target number will shift periodically as the market size shifts. Thus, the market share firm’s goal will differ month to month.

The calculation is similar to the growth firm scenario, but it requires some fancy footwork to apply. Lead value will still be a step function, but the step size moves very quickly. You will still divide the number of new customers desired by the close ratio, but you’ll be working with a very short term lead target. Because this target moves, the marketing department needs considerable flexibility to keep adjusting the lead requirements.

Firms That Strike a Balance

Most firms seek the highest number of profitable customers, irrespective of whether they are going for growth or share. These firms purchase leads to the point at which customer acquisition cost equals customer lifetime value. When these two goals reach equilibrium, the firm stops buying leads.

In such situations, you can compute the value of a lead by knowing your salesperson costs, your close rate, and the value of an account, and applying the following formula.

Lead Value = (Account Value – Salesperson Cost) * Close Rate

This is the lead pricing formula. With this in hand, plus an understanding of your primary sales goal, you will be well on your way to an accurate assessment of how much to pay for a lead.

Source: Jeff Feuer

Complete Media Inc is a Sioux Falls marketing, advertising, website design and web hosting company specializing in web design, maintenance and hosting services.

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Improve Your Closing Ratios with Marketing

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On average, it takes 75 cold calls to make one sale to a net new customer.

Recently I was speaking at an event and a sales rep selling training services noted that in her industry the number is closer to 1 in 125. Either way, the numbers are high!

On average, clients see a closing ratio of 1:2 for referred leads and 1:5 for call-ins. Knowing that, wouldn’t it be better for everyone to change your sales strategy to focus on increasing referred leads and calls-ins?

How can you get more referrals? As a quick tip: ask for them every day. Most sales people I coach don’t have a habit of asking for referrals regularly, nor do they have a referral strategy that is consistently executed. Therefore, most sales reps don’t have a consistent flow of referred leads into their business.

How can you increase call-ins? Write. Take some time to write a few quick tip articles that are relevant to your client base and can help them grow their business. If you have convention space at a hotel, write about the “Top 10 Things to Consider When Booking Your Next Convention;” if you sell lawn tractor equipment, try “The Best 5 Ways to Ensure a Healthy Lawn This Summer.” The options are endless, and the trade magazines that serve your customer base are hungry for content.

I have found that writing and publishing articles are the best ways to get customers to call you. Why? Because the articles you write define you as an expert in your field and position you as a valuable partner, not just a sales person. The more often your articles appear online or in print, the more relevant you become to your clients and prospects, and the more they will want to do business with you.

Don’t wait for your marketing department to write for you. Do it you yourself. Start with a five-tip article that focuses in your area. Write out the five points first, and then add a paragraph or two of detail below each. You will end up with a 250-500 word article perfect for publishing. Be sure to send to all the relevant trade publications (online and off) with your contact information and website!

Source: Colleen Francis

Complete Media Inc is a Sioux Falls marketing, advertising, website design and web hosting company specializing in web design, maintenance and hosting services.

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Top 7 Strategies To Improve Profit

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Making your business more profitable involves looking at ways to increase sales revenue as well as decreasing your costs and benchmarking your business to see where you can save money.

Here are seven effective strategies to improve profit:

1. Remove Unprofitable Products and Services

The products or services with the highest gross profit margin are the most important to your business.

Once you have identified your most profitable products or services you should concentrate on these.  You will need to determine if the unprofitable products or services should be removed completely or reviewed for areas of improvement.

2. Find New Customers

New customers can help grow your business.  However, this can sometimes be the most expensive strategy for generating additional revenue. On average it costs eight times the amount of money to acquire a new customer as it does to retain a current customer.

The simplest (and most cost effective) way to get new customers is to offer incentives to your current customers and motivate them to initiate referrals for you.  Word of mouth is the most powerful form of advertising.

3.  Increase your Conversion Rate

Generating new leads is an important part of business growth.  But do you know what percentage of these leads eventually convert to a sale?  Increasing sales conversion in your business is one of the fastest and lowest cost methods to boost your business profits.

4.  Review Current Pricing Structure

Raising prices can be a terrifying prospect; however a small increase in your prices can make a significant impact on your gross profit.

Therefore, correct costing of your products and services is very important.  You should review the costing of your products regularly and adjust your prices accordingly.

5.  Reduce your inventory

Stock control is a good way to streamline your business and improve cash flow.

With less money tied up in slow-moving inventory and fewer losses due to expired or discontinued inventory. Ordering more frequently allows you to compare prices and take advantage of seasonal clearance or overstock discounts.

6.  Reduce your overall direct costs

Reducing your overall direct costs will have a significant impact on your gross margin.

One way to reduce your direct costs is to negotiate better prices or discounts for everything you buy. Provided the quality is comparable, finding the best prices may require finding a new supplier.

Another way to reduce your direct costs is to eliminate unnecessary purchases.  A thorough review of your direct costs should highlight any areas where overspending has occurred.

7.  Reduce your overheads

For many businesses overhead expenses have a way of creeping up over time.  Regular review of your overhead expenses is a simple and effective way of improving your net profit.  Benchmarking your business to similar businesses in your industry may highlight areas for improvement.

Source: Altitude Advisory

Complete Media Inc is a Sioux Falls marketing, advertising, website design and web hosting company specializing in web design, maintenance and hosting services.

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The Big Impact of Small Business Marketing in Sioux Falls

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Collaborative Effort with Clients Reaps Economic Dividends

Recently, our marketing and advertising agency in Sioux Falls put a pencil as to how the clients we represent impact the local Sioux Falls economy. What we discovered is a multi-million dollar ramification that cannot be ignored.

In 2016, the combined trackable revenue growth among our just over one hundred clients was $6,306,893.91.

Additionally, if one assumes the typical business designates 1% of their profit towards charitable giving, that translates into $643,068.00 in donations among Complete Media clients. The typical client staff averages fewer than a dozen.

For over fifteen years, our Sioux Falls advertising agency has been working to assist our clients with all aspects of marketing, advertising, and business development by offering services including graphic design, copywriting, web development, video production, media services, public relations, campaign management, and event planning.

Several years ago, our owner and president, Matt Luke, recognized a certain segment of the local business community was being underserved when it came to marketing and advertising. Small businesses often do not have the luxury of hiring traditional agencies, so they either do little to no marketing, have only sporadic, piecemeal campaigns, or try to manage marketing efforts themselves, along with all of the other day-to-day business operations. Matt decided rather than continue to cater to any and all businesses, our company would focus on those businesses which needed marketing support and a feasible option by which to afford professional agency services.

Over the past several years, we have courted, attracted, and partnered with small- to medium-sized businesses, many family-operated, and all but a few locally based. Our agency focuses on trackable strategies providing the best return based on the client’s budget. This approach tends to emphasize online positioning and branding versus promotional product development and intermittent media campaigns — not to their exclusion, but rather implemented on an investment return basis and affordability to execute with necessary frequency. It’s a win-win for the business and the community.

Complete Media Inc is a Sioux Falls marketing, advertising, website design and web hosting company specializing in web design, maintenance and hosting services.

We help small businesses make more money. Learn more.

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Defining Marketing Objectives & Strategies

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Marketing Objectives are defined as the group of goals set by a business when promoting its products or services to potential consumers that should be achieved within a given time frame. A company’s marketing objectives for a particular product might include increasing product awareness among targeted consumers and providing information about product features. Specifically, common marketing objectives include:

  • Introducing new products or services
  • Cross-selling more products or services to existing customers
  • Expanding into a new geographic market
  • Seeking out and securing new customers
  • Improving customer services
  • Increasing the average size of an order

Once the Marketing Objectives have been defined, you can create a focused Marketing Strategy for each one. Marketing Strategies have many potential tactics that can be utilized. Below are examples of Strategies with their corresponding tactics:

  • Market Share & Expansion Strategy: Develop aggressive sales & marketing tactics to expand your market. Examples of tactics include:
    • Consumer and/or trade promotions (e.g. coupons, BOGO’s, contests, special offers, etc…)
    • Direct mailing to include incentive
    • Secure additional distributors and/or sales force
  • Positioning Strategy: Designed to affect how people think and feel (perceive) about your product or service. Examples of tactics include:
    • Advertising and public relations campaigns
    • Attending, exhibiting or presenting at trade shows
    • Enhancing and/or developing corporate communication and marketing materials (e.g. brochures, website, flyers, social media profiles, etc…)
  • Reminder Strategy: Reminds customers to make a purchase. Tactics include:
    • Postcards via direct mail with coupons
    • Free premium items with company’s information
    • Disseminate monthly newsletters
    • Communicate newsworthy information via social media

Determining which Marketing Strategies are necessary and important based on your business goals is critical to the success of growing your company. If done incorrectly, you will only end up wasting a lot of time and money on implementing the wrong strategies. Needless to say, my advice is to seek out a qualified Marketing Consultant who can assist you through this process.

Source: Danielle Foley

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How Does Target Market Media Consumption Affect Strategy?

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Knowing the media-consumption habits of a target audience can help a business owner create an effective marketing campaign. For example, if target consumers favor a particular media channel – such as a television station, radio station, magazine or newspaper – you can use that information to deliver your marketing messages directly to them.

Consumption

Your target customers may enjoy a particular aspect or offering of the media channel. For example, they might watch a specific television program, listen to a particular radio show or flip directly to the sports section of the newspaper. Understanding media consumption habits in this respect helps you place your advertisement effectively within the media channel.

Context

It also helps to know what consumers are doing while they are using a media channel. Suppose a car dealership decides to reach its audience by advertising on a radio station in the morning. Knowing that most people are driving to work at this time of the day, the dealership might design an advertisement that speaks directly to commuters by explaining how a comfortable car can ease the pain of sitting in traffic jams. Similarly, if the dealership knows target consumers tune in to the radio station while they are busy working or making dinner, its advertisement might use loud jingles and sound effects to catch the listener’s attention.

Market Research

Business owners can hire a market research firm to help determine strategies for reaching a particular segment of the population. Market researchers draw on a large variety of techniques to study consumer behavior to create behavioral profiles and help advertisers tailor marketing campaigns to the consumption habits of their target audience. Researchers might use surveys, focus groups and questionnaires to generate a database of media consumption habits. They then use statistical methods to identify consumption patterns, providing valuable insights that help advertisers identify the most cost-effective strategies for reaching an audience.

Media Planners and Buyers

Media planners and buyers help businesses implement marketing campaigns. These experts can orchestrate complex strategies, such as airing television commercials in short bursts during periods when the target customers are likely to be watching. The alternative approach – airing commercials during every available period – would drain an advertising budget unnecessarily. While hiring all these marketing experts might seem expensive, the investment pays off if you can avoid wasting money on ineffective strategies.

Source: Stan Mack

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How to Create a Target Market Profile

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Creating a target market profile and positioning statement is a process that helps business owners to identify and communicate with the prospects that offer the greatest chance of sales success. A target market profile is a concise description of the type of prospect you want to sell to. A positioning statement is a brief summary of the way you want prospects to perceive your product or service.

Define the target market for your products or services as precisely as possible. A target market profile identifies the characteristics of the prospects most likely to purchase from you. Use characteristics such as age, gender, location, income level or education to build the profile. Age or gender are important characteristics if you sell products such as clothing or children’s games. Focus on location if your products are only available in certain areas or if they are location-specific, such as hiking or skiing equipment. Income is important if your products carry a premium price.

Profile business customers by a different set of characteristics, including size of business, industry sector and location. Identify the decision-makers in target companies. The decision to purchase your product may involve business, financial or technical personnel as well as senior executives if the purchase represents a significant capital investment. An example of a business target market profile is medium-size companies in the manufacturing sector, based in the Midwest, with a turnover of more than $2 million.

Research the interests and preferences of your target market to find out what they feel is most important about a product like yours. Approach customers for feedback, asking them about important features and benefits. Consumers might consider factors such as “the product improves my lifestyle,” “it saves me money” or “it makes me feel healthier.” For business customers, identify the opportunities and problems that face different types of businesses by monitoring customer feedback or reviewing industry surveys. Challenges such as reducing costs, improving quality, speeding up time to market, or improving competitiveness are issues facing many types of business.

Build a more detailed profile of your target audience by capturing information on their interests and requirements on your website. Offer website visitors publications or special offers that they can download after completing a registration form. Provide a page where visitors can create and update their own profiles and request certain types of information from you. Analyze their preferences and record the information they request to build personalized profiles.

Identify the product benefits that represent the greatest value for your customers. Compare the important factors with the performance, features and benefits of your products. If your product aligns with the main customer factors, use those factors as the basis for your positioning statement. Compare your product with competitors’ offerings to assess how you can differentiate your product. Relate your differentiation to the most important customer values.

Create a positioning statement for each distinct customer sector. Use a consistent format such as “for this target audience, our product provides these important benefits that our competitors cannot match.” Use the positioning statement to create compelling messages to motivate the prospect to buy. Incorporate the key elements of the positioning statement in all your marketing communications so that prospects receive consistent messages at each point of contact with your company. Share with employees target market profiles and positioning statements so that they not only have awareness, but also going forward they are constantly reassessing the criteria used to define the target audience and how elements may influence that audience and what adjustments might need to be considered. It is crucial to the culture of any company that employees are keenly aware of who it is they serve: the customer. Who they work for is the boss.

Source: Ian Linton

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How to Define Your Target Marketing in 5 Steps

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What’s my target market? What should it be? How would I know? Here’s a list of five things that will help you figure it out.

1. Don’t try to please everybody.

Strategy is focus. Say you’re running a restaurant; which of these three options is easier?

  • Pleasing customers 40 to 75 years old, wealthy, much more concerned with healthy eating than cheap eating, appreciating seafood and poultry, liking a quiet atmosphere.
  • Pleasing customers 15 to 30 years old, with limited budgets, who like a loud place with low prices and fast food.
  • Pleasing everybody.

I really hope you chose one of the first two, and not the third. Because this is the essence of target marketing—divide and conquer.

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U.S. census data divides into demographic segments.

2. Learn market segmentation.

It’s about segments, like pie segments or orange segments, except that in this case it’s segments of a total market. In my “divide and conquer” thought above in the first point, those are segments. In the illustration above, U.S. census data divides into demographic segments. Demographics are the old standards like age, gender, and so on.

3. Use segmentation creatively.

Don’t just settle for age, gender, and economic level. When I was consulting for Apple Computer, we divided the market into user groups:

  • Home
  • School
  • Small business
  • Large business
  • Government

I also liked a shopping center segmentation that divided its market into so-called psychographic segmentation:

  • Kids and cul-de-sacs were affluent upscale suburban families, “a noisy medley of bikes, dogs, carpools, rock music and sports.”
  • Winner’s circle were wealthy suburban executives, “well-educated, mobile executives and professionals with teen-aged families. Big producers, prolific spenders, and global travelers.”
  • Gen X and babies were upper-middle income young white-collar suburbanites.
  • County squires were wealthy elite ex-urbanites, “where the wealthy have escaped urban stress to live in rustic luxury. Affluence, big bucks in the boondocks.”

I knew a business that segmented its business customers into decision-process types as well:

  • Decision by committee
  • Decision by functional manager
  • Decision by owner

Any of these creative segmentations can help you set a target market.

4. Consider your own unique identity too.

Your business probably reflects who you are and what you like to do, as well as what you do best. Marketing to people you like is an advantage. If you like the feel of small business better than the big corporate giants, then you’re probably better off setting the small business as a target market.

As this business—Palo Alto Software, the host of Bplans—grew up, with business plan software, its founder (that would be me) was more comfortable with the do-it-yourself entrepreneur and business owner than the high end consultants, so we ended up targeting the do-it-yourselfers in business.

So, somebody who loves fine food, tastefully prepared and served, is probably more comfortable with an upscale target market than with price-sensitive young families.

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5. Use strategic segment intersections.

For example, in the diagram here, the social media services that Have Presence offers are targeted to small business owners who:

  • Want outside help with their social media; and
  • Value business social media; and
  • Have budget to pay for the service.

Defining target markets makes your life easier. Do it well as soon as you can, and keep reviewing and refreshing as you go along.

The right target market increases your chances of success because you can communicate better with a well-defined group, and that holds expenses down and makes results better.

Source: Tim Berry

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