Recognize your value: 6 qualities that make a good customer

How many customers do you have?  How many good customers do you have?  How many bad customers do you have?  All business owners know the definition of a bad customer, someone who is not worth your time or money.  What is your definition of a good customer? I have 6 simple components on what makes a good customer.  Below I share with you the six things, which can be translated across any business and can help you to evaluate and identify where a problem area might be.

1. Desire or need.  (They think: I want it or I need it)
2. Ability to pay.
3. Value.  (They think: This will help me__(fill in the blank)__)
4. They buy it
5.They buy it frequently
6. They pay full price

The first 3 things are important; but they are hard to measure,  identify and quantify.  That’s why I suggest to my client that they focus on the points 3 thru 6.   This is about behavior. What do they do.  It is much easier to track and measure behavior than desires and perceptions.

Of course, one of the most critical components is to have something that customers really WANT  or NEED .  This is called value.  Value simply means that the customer thinks it will somehow improve their life or help them solve a problem (no matter how small or insignificant).

There are 2 ways to increase your value equation.  The first, easiest, but also the most damaging way is by lowering costs.  If you continue to lower costs, your customers will come to expect these reductions again and again, and will never pay full price.  The only way to truly increase your value to your customer is to truly understand your target market.   You have to really know what bothers them; what makes they happy; what makes them happy.  If you don’t understand who they are, what they do, what they are thinking you will never understand what they think is important.  You first must be able to clearly identify what they think is a benefit and then deliver this benefit to them.

Just Do It

Last week I spent 5 days in San Diego attending an intensive  course in “Advanced Sailboat Racing.”  It reminded me of what it was like to sit on the other side of the room as a “customer” for a seminar.  I paid my money and had certain expectations of what I wanted to learn, much like the attendees of my SCORE seminars.

What I learned is this: Someone  can stand up  and tell you what everything they know about sail boat racing, based on their experiences and knowledge.  But the  only thing that will actually make you a better sailboat racer is to get out  on the water with other boats and start racing. We learn by doing.

I bet you can guess where this parallel is going.  I can talk until I’m blue in the face about all of my experiences, you can attend every single marketing seminar SCORE has to offer, you can read every book available.  The only thing that will make you better at marketing is to get out there and do it.  Will it work to have a special promotion?  I don’t know, try it and see if it works.!  If it does, keep doing it.  If it doesn’t work, tweak it or do something else until it does.

The purpose of any business, is to create a customer.  If there is no one who wants what you have, you have nothing.  “Marketing” then  the “how to” part; increasing your ABILITY  to get and keep a customer.  What marketing tools do you utilize to achieve this?  Direct mail, online marketing, advertisements?  It all probably works for some business somewhere.  The key is to locate your target market then use tools that will effectively reach them.  How can you get those customers then keep them?There is no formula that I can provide you with that will solve all of your marketing needs.  Each business is different, each customer is different, each situation is different.  The secret to success really goes back to doing.  Do it.  Keep doing the things that work.  Stop doing the things that don’t work.  Do it again and again.

I will remind you of this constantly I’m sure, but the only thing for sure in marketing is: nothing is for certain.  So get out there and start trying things to see what works for you and what doesn’t.

March 27: Become an Internet Marketing Genius in One Day

My next seminar will be with SCORE on March 27, 2010. It is a joint seminar with Bob Bradley called:

Become an Internet Marketing Genius in One Day. Learn How to Put Marketing Theory to Work on the Internet.

Location:	National University, 3390 Harbor Blvd., Costa Mesa, CA 92626
Dates & Times:	March 27, 2010 – 8:30 a.m. to 4:00 p.m.
Cost:	$60 pre-register online only. No walk-ins. Includes lunch. Workshop limited to 30 attendees.
More Info:	This course, taught by Tom Patty and Bob Bradley as co-presenters, attempts to provide the small business owner/operator with everything you need to know about Marketing so that you can begin to actually implement great marketing strategies on the Internet. The first part of the course (Tom) covers the five essential elements every business must understand: (1) How to identify the target audience (2) How to define your primary consumer benefits (3) How to improve your value equation (4) How to understand the consumer purchase process and, finally, (5) How to develop a growth strategy for your business. The second part of the course (Bob) will show you how to implement these concepts on the Internet by looking at specific examples. The third part of the course (Tom and Bob) encourages participants to share and “test market” ideas about their specific business with the rest of the class as they ‘Stand in the box” and get feedback from the class and the instructors.

For more info and to register please visit the SCORE workshop page:

http://www.score114.org/workshops_marketing.aspx

March 9th SCORE Seminar

Thank you to everyone who attended my  SCORE “Turbo Charge Your Marketing” seminar yesterday, March 9th, at National University.  It was such a great group that attended, I hope everyone got out of it as much as I did.  It is always rewarding to be involved in a seminar that gets so many ideas flowing and has the potential to help people, this is why I do these things.

If you have any feedback to post, or questions to pose to the entire group, please use the comments section below as a means of doing so.  My hope is that it will help people who attended to connect and share ideas.  You can also sign up right here (on the left hand side) on my blog to receive email updates whenever I post something.

Hope to see some of you in Dana Point.

Best,

Tom

We learn by DOING

For those of you who know me (and for those who don’t), when I say I want to master something there is no stopping me.  I have spent the past week on my boat doing just that, mastering sailing.  The short of it comes down to this, whether owning your own business, marketing, sailing, whatever it may be there is no better way than learning by doing.  You cannot be afraid to do so.  For the longer version of the story, and of course some of my on seas adventures stay tuned…

Tomorrow I will be in Costa Mesa giving my seminar, “Turbo Charge Your Marketing”.  I am always excited for these seminars, as each time I learn about new businesses, hear some great ideas, and it really is different every time.

Side note: for all those who attended my seminar in Mission Viejo on February 23rd and were NOT completely satisfied, I am offering you the opportunity to attend tomorrow’s seminar for free.  Please contact me for more information.

Well, they “could-be” a customer..

I recently gave a marketing seminar to a group of people who work for non-profit organizations interested in “Social Enterprise” (i.e. Creating revenue for their organization by  selling products or services.)  Anyway I began this seminar  by talking about “the target audience”, because at the core of any good marketing plan I believe it all starts with getting your  target market right. You need to select “the best possible target (meaning the one who will most likely buy your products or services).

I gave a few examples, pointing out that what we want to find out (in any area of business) is “what do people DO?”  In other words, what behavior can we identify that proves they are a good target customer?  I am always looking for a word, usually a verb, to describe their behavior.  So, for example, if the subject is politics, the key word is THEY  “VOTE.”  (In most elections, less than half the people actually vote.)   If the category is “beer,” I want to find people who BUY (not just drink) beer.  So one of the most effective first steps in defining your target is to eliminate “who is NOT in your target?”

So I asked the group, ‘If you are running a marketing campaign for a politician, who is NOT your target market?

Since this seminar was in Orange County, the first answer I got was “Democrats.”

“Okay” I said, “but how about people who don’t vote?  Are they in your target audience?  Shouldn’t you focus your efforts and money on the people who vote?

The answer I got was, “But they could vote.”

And here we come to the core issue.

Do you want to spend your money, your time and energy against people who COULD (possibly, maybe someday) do something or people who have proven that they do this on a regular basis?

If you are a big company and hundreds of millions of dollars to spend in your marketing budget, maybe this might (and I mean might) make sense. But if you are a small business owner with limited or zero dollars for marketing, this is simply not a good investment strategy.  You are much better to spend your resources against the group of people who already vote or buy beer ( or anything else) rather than those who might someday vote or buy beer or whatever.

You can spend a lot of time and money on these “could-be” clients.  I don’t recommend it.  Why not spend the money marketing on people who have already proven they use these products or services? This is basically about concept of “the few versus the many.”  In many situations and organizations, we have all heard about the “20/80 rule.” It means 20% of the people in an organization produce 80% of the work.  20% of people who buy beer, buy 80% of all the beer bought.  Etc. etc.

The heart of the matter is you have to have a small group of people who care intensely about what you have to offer.  This is your target.  Figure out who they are, what they want, and when they want it.  Then do your darndest to give it to them.

Marketing Department of One

Having worked with some of the biggest marketing budgets out there, it was a transition for me when I began working with SCORE.

Many, if not all, of the people who I counsel and speak to have a marketing department of 1 and a marketing budget of Zero.

I hope this blog with offer you insight and knowledge in running your own small business marketing department.

Remember, in marketing there is only one thing that is for sure: “It depends”.