Determining Target Markets - Overview
Who exactly is going to utilize your product or service? Have you asked and answered that question? Do they have the money to buy?
your job or his?
The job of truly understanding market segmentation and customer profiles is a broader responsibility involving differing skills and experience from a broader range of the team. A sales force is often asked to solve this question, on a “trial and error” basis, where they cold-call lots of people at random and report back on whatever they learn from the suspects’ response.
The outcome is unscientific to the point of being completely unreliable and more than useless because it most often results in false data and misleading information. The right suspects have to be asked relevant question sets to determine the best prospective customer profiles with the greatest needs-matching, offered cost/benefits and perceived value delivery. Only when an established profile is developed through market analysis techniques can salespeople be focused to deliver effective performance targets.
unlikley but effective hunters
Salespeople have to be managed effectively to win profitable business by defining their prospect targets clearly and providing to them tools to close the sale before the next guy. Salespeople are often talented hunters but, for maximum efficiency, they need the prey to be carefully defined for them. If you say, “Go shoot rabbits”, without first defining rabbits, salespeople will shoot at everything that moves, declare them all to be rabbits, and argue that whatever they hit is proven to be a “rabbit”. This wastes time and valuable resources and won’t secure profitable customers who can be serviced on a scalable basis.
Given any amount of time, salespeople are not able to identify the most appropriate target customers; it isn’t their skill set. Salespeople are great at determining a matching solution to a customer’s needs, but help them by eliminating as many suspects as possible. They will then be able to focus on the worthwhile prospects, beat their sales & profit targets, within budget expense and be the indispensable asset which every company, large and small, must have.
Some customers simply aren’t worth having. eliminate them from your target audience! (yes, we know you didn't invite them... or did you?)
Bad customers place too many demands on management time or negotiate pricing targets that invalidate standard, internal cost disciplines. Yet companies desperately fighting for revenue often hold on to them, miring themselves in a downward spiral of unprofitability, and excusing the tactic as “gaining market share” or “ reaching for critical mass”. Don’t be misled, only large, monopolistic corporations are stable enough to price competitors out of a market.
The lesson: Get rid of them now. “Shedding money-losing customers is vital to work towards stable operations in the future.
Money losing customers are a bad smell! Always take a shower and wash yourself of them.