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Should you reach or target? Why small business owners must do both.

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Probably the hardest part of marketing is choosing who you want to serve. This is because by choosing who you want to serve you choose who you will not serve, ultimately turning down sales.

Not natural to a small business owner.

In life, I would advise being a generalist. Based on some profound discoveries from David Epstein’s Book Range: Why Generalists Triumph in a Specialized World, I am fairly convinced organizing your days and tasks in such a way to unlock all parts of your brain is critical to focusing on the granular work required to be proficient.

When it comes to growing your small business, however, you do not have the resources to reach everyone. Based on necessity you need to target a certain group. But there are major caveats.

Based on the research of Peter Field and Les Binet, following these two basic rules will help guide your strategic decisions.

Two basic rules for advertising

  1. Target groups when conducting sales activation tactics. (around 40% of budget)
  2. Reach as many people within the market as your budget allows within your market for brand building activities. (around 60% of budget)

Quick Definitions:

Sales Activation Activities: Any marketing activity that evokes a short term or immediate response. Sales activation helps capture the demand that already exists.

Brand Building Activities: Any marketing activities that build the mental structures of customers to slightly think positively about the brand. Brand Building has the ability to create demand, and capture much of it.

Short term sales activities are usually highly efficient, however, long term brand building generates a higher rate of return in the long run.

You need both, and usually, they work best at a 1:1 ratio. Why?

You can categorize your customers simply enough in two groups. Out-of-market customers and in-market customers.

You usually have a better sense as to who your in-market customers are, but not much of a feel for your -out-of-market-customers.

You have no idea who will be your next customer. Facebook, Instagram, social media, PPC, and display advertising don’t know either. That is why you must reach a large enough audience.

You must be in the hearts and minds of future cash buyers even if you can’t measure it. Here is why.

By slightly changing the minds of potential customers to think positively about your brand, the moment they go from out-of-market-customer to in-market-customer you already have a huge advantage over your competitors. Your competitors might be working the sales activation game, but when you have both functions rolling effectively, your sales activation will capture what your brand building has developed.

What happens when you build the mental structures among customers to slightly think positively about your brand?

Pricing power is increased – meaning, the ability to charge more compared to competitors, and still retain the positive feeling toward your brand.

Long term recurring sales – your runway for creating additional sales have increased, providing you with cash flow, and additional information.

Short term sales – your short term sales no longer have to work as hard making them even more efficient.

Here is another dirty little advertising secret – people don’t make decisions in a vacuum. Try not to get captured and hypnotized into thinking marketers and advertisers know exactly when a customer will look, click, and buy. They may understand and can measure this further in the buying cycle, however, you will continue to run the “sales activation of death” if you solely focus on the bottom of funnel activities for your customers.

Okay – perhaps you are convinced to conduct some reach campaigns but why not go all-in? Why would you need to target?

The closer the customer is at the buying point, the more valuable they are, which means the more expensive they are to advertise to.

BtoB Trends LinkedIn.

It would help if you spent some of your budgets on sales activation. So how do you go about balancing these two?

One word. Focus. By strategically focusing on a group within your market, you are better able to allocate your funds appropriately. You have less wastage and a lot more opportunities to develop profits quicker, particularly in the sales activation end.

By choosing a target audience, you will be better equipped to make strategic decisions resulting in more effective campaigns.

Target and reach campaigns also require to be very different types of campaigns. You absolutely need to have your brand integrated, meaning, customers can tell it’s a <insert brand> type of ad, but these ads will have fundamentally different principles to follow.

Sales activation activities or target campaigns usually are designated for “in-market-customers. At this stage, they have already identified a problem which they need to solve, and they probably have already researched and evaluated all the options. At this point, the advertising needs to be rational, precise in its copy, and can usually be measured in effectiveness based on sales. The best sales activation activities are highly personalized. For example, an ad for a parent with a baby at home about to finish off their size 2 diapers, is shown an ad with size 3 diapers.

A brand building or reach camping requires the ad to be highly emotional, with the broadest reach possible. These kinds of campaigns can be measured through “memory metrics.” Memory metrics ask questions like – Which brand do you prefer? Do you think positively, negatively or natural about the following brands? Or when you have a headache what brand do you think of?

BtoB Trends LinkedIn.

How do you choose your target audience?

Step 1: Define the profile of the strategically aligned segment

This is where you go a little deeper into the segment analysis you would have conducted. What makes this segment unique from the rest. Can you define further demographics? Age? Gender? Social class? Stage in sales cycle etc.

You should also look at the behavioural factors or the psychographics. Why do they buy the products/services you have to offer?

You are going from a view of 100,000 feet to now about 10,000 feet.

Step 2: Assess the viability of this segment

Can you actually reach the targeted segment you have chosen? It’s one thing to identify an opportunity, it’s another to evaluate if you are capable of taking advantage of that opportunity.

What channels does this target audience operate in? Can you be part of that channel? Can you purchase that channel? Ever thought of purchasing a list? A list of our target audience? Now might be a good time if you want the attention of your target audience.

The question here is – is it possible to reach the target audience with respect to your ability to offer products they would like in a cost-effective manner? Cost-effective advertising usually means targeting a segment that already thinks positively about your brand. Avoid changing the hearts and minds of customers if you desire to be cost-effective.

If you identified you need to change the hearts and minds of a particular segment give up now, or go back to the reach campaign and stop thinking about being cost-effective for at least 5 years. You will need to invest in brand-building campaigns that garner a positive emotional response.

Step 3: Commit to Target Audience

You have gone through the process and now you know it’s feasible. The challenge is to commit and stay committed throughout the plan, and year.

Jim Collins evaluates and compares good companies with great ones. He claims disciplined people, thinking, action, and built to last, are what deliver superior results. 

Once you go through the exercise of choosing a target audience, the hard part is staying ridiculously focused when designing the other elements of your marketing system.

Now we must think about how we are to position ourselves in the hearts and minds of this target audience.

What do we want people to think?

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