Save 80% Time & Money: How to Market to the Crucial 20%
Wouldn’t we all like to save 80% of our time, money and marketing effort, while getting 10 times or even 100 times the results?
However, that’s just what Cara accomplished. Let’s see how she did it, and how easily you can do the same.
Starting out, Cara did what most failing marketers do… she found a “deal” renting a cheap list of 5000 prospects for 20 cents per name. It cost her an extra dollar per person to get the offer in front of her list. Total cost: $5500. Since 40 people bought her product at $100 profit each, she got $4000 back for her effort.
Poor Cara. She lost $1500 on this campaign. (Okay, I rounded the numbers, but this is really close to what happened.) Sadly, she thought her target audience should be “everyone interested in my product.” But the school of hard knocks really motivated her to take a closer look at buyer personas and exactly who her ideal audience is.
“What things do I need to look at to find my ideal customers?” Excellent question, Cara.
Fortunately, she found a great data provider who guided her through modelling tools and buyer propensities. Cara selected a list of only 500 prospects. Sure, these extra data analytics cost $2 per name instead of 20 cents each. Was it worth it?
Well, considering she spent the same dollar per person to get her offer in front of the new list, her total cost was $1500. This time, she sold to 30 people, making sales totaling $3000. Yay for Cara! This time, instead of losing, she doubled her money.
Really though, she saved 73% of her marketing cost. And she converted 7.5 times as many prospects into sales. But, you may say, how could you get 100 times the results? Another great question.
We’ve all heard of Mr. Pareto. The original 80/20 guy. Truth is, his principle can be applied to itself. Not only will 20% of your best prospects give you 80% of your profits… The top 4% of your prospects will give you 64% of your profits. (20% of 20% and 80% of 80%.)
So, if you can identify the top 20% of your best prospects, you can really be 16 times more profitable. And if you identify the top 4% of your prospects…wait for it…you can be 250 times more profitable . If you are not following this formula, “you are leaving millions on the table,” says Brian Kurtz, Executive Vice President of Boardroom Inc. and leading direct marketing expert.
Don’t think it’s that valuable to niche down this much? Look at Amazon. They specialize in one tiny niche after another. And even a decade ago, that’s how they sold 50% of their books. Even small businesses can compete with large companies by targeting a smaller niche like this.
How can you make this easy for your business?
Let’s say you’re the Dallas Cowboys. Most fans will get into the stadium for $19. Some of them will get $1000 season tickets for the mediocre seats. Only a few will get the $10,000 seats near the 50-yard line. And a tiny fraction of them will dish out far more money than this to enjoy the ultra-exclusive sky boxes. How much will a raving football fanatic (with money) spend on football? A virtually unlimited amount. You want to find THIS kind of people. And you CAN (and should) find them.
Even if you’re only the company selling the peanuts.
Ask yourself about demographics: Who are your best customers? How old are they? Where do they live? What about their gender, income level, education, family/marital status, occupation and ethnic background? Now, ask yourself about their motives. What makes them buy? What is their personality, attitudes, values, interests/hobbies, lifestyle and behavior?
How can you know this stuff?
It’s not as hard as you might think to learn the right way to use a propensity modelling tool. Or some brand new (and yet relatively inexpensive) methods to give you real behavior data on your ideal customers.
Or better yet, call us. We’re happy to walk you through our tools right now.
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