Single Target Market and the Life Time Value

B2B, life time value, Marketing, Product Management, single target market

I came across the concept of the Life Time Value from Jay Abraham while reading his book, Getting All You Want from All You Have. It was a very intriguing book name and I couldn’t end up not buying it. Since then I have read it multiple times to find new ideas and ways of thinking.

The Single Target Market concept, I have learnt primarily from Dean Jackson. The advantage of this concept is that you can get to focus all your energies on just one segment of the market at a time and then Dominate it, before moving forward to the next Market.

Each entrepreneur, product manager, marketing manager has multiple markets, that they can focus on and it is counter intuitive to focus on only one.

The reason I keep coming back to discuss on the single target market time and again is because I use it myself and find new applications for it when analyzing different businesses.

A good way to analyse the relative economic values of each market and then choose the one which is the most lucrative. So if you knew what’s the life time value of a customer and you knew that you had the potential to pick up at least 30% of the market then you could take a call on how you could go about investing.

So let’s take a B2B example where the Life Time Value of a customer is say $100000/- at a Gross Margin of 30%. Now let’s assume that there are a total of 1000 potential customers in the segment you have chosen. The bottom 20% will never buy from you. That leaves about 800 prospects. Out of these 800 some are in pain right now, some will get into the pain stages over the next 5 years.

So your potential market yield could be $80million over 5 years or a gross margin of $24million. If you can earn $24 million what would you be willing to spend to get these customers. If on the other hand the other market segment can only do $80000 LTV per customer at a GM of 25% then the potential yield of this market is $64 million at a GM of $16 million. So how much can you now spend to get the $16 million.

So that is the combination to help you choose which is the most promising market for you to enter.

If you have any queries, please raise them in the comments section. I would love to hear them.

Till next time then.

Carpe Diem!!!

P.S: If you are interested in getting a free copy of my “7 point checklist for B2B markets”, you can ask for it, by filling in your details below.

← Back

Thank you for your response. ✨

Follow-ups – how much is good?

B2B, follow-up, Marketing, persistence

One question that I get very often from my team is – “if we send so many follow-up emails, won’t the prospect get offended and unsubscribe”. We deal in B2B customers and therefore the general audience is never large, so they are scared that they may lose one prospect from the small set of prospects.

If your follow-up is – just wanted to check if there’s any update for me – then yes – its irritating and people will get offended and not bother to pick up your calls or unsubscribe from your mails in the future.

But if the mail or call has value then they will look forward to receiving your mails or calls. If on the other hand, if inspite of the fact that you are sending them something of value and they still unsubscribe to your mails or stop taking your calls, then it’s a good sign. They would not have become a good customer for you anyway.

Since our time is extremely valuable, it’s extremely important that we eliminate the people who anyway don’t value our services. You should look forward to delighting people who value your service not to people who don’t value it. That’s a wasted effort.

How do you create value in your communications – you share case studies of how you have helped others. You share challenges, that other customers had, that you helped solve. You could have created some new setups/solutions, found a new way to sanitise the rooms. With B2B prospects, there’s a lot of ways you can create messaging.

If not, you can share industry news that you found, or send them a book. But you have to be persistent in reminding them of your presence because, they shouldn’t miss out on talking to you when they actually have a need.

Till next time then.

Carpe Diem!!!

P.S: If you are interested in getting a free copy of my 7 point checklist for B2B markets, you can ask for it, by filling in your details below.

← Back

Thank you for your response. ✨

Lettuce and Garbage

B2B, Marketing, persistence

The difference between lettuce and garbage is Timing. If the lettuce is used at the right time, its good for health and can be used for layering various foods. On the other hand if you don’t use it when its fresh, it can cause food poisioning.

In case of marketing, timing is a major factor for success. In case of investments , I strongly suggest doing systematic investments so timing becomes irrelevant.

However in case of marketing, if the customer doesn’t think of your name when “her” need arises, then you will lose the sale. That’s the reason why you see the advertisements of Coke, Pepsi etc. all year round.

Even though B2B buyers are not impulsive, the logic still applies. If when the buyer begins to start evaluating a company to replace an incumbent and you are not in front of them, they may not contact you and you could lose a lead.

People have so many things going on in their lives, expecting them to remember you because you sent them some information or called them, about 6 months back, doesn’t work. Obviously you don’t want to bombard them with messages which are only self serving. If you add value to their business and then talk a little bit about yourself then its okay.

Till email was not prevalent, most companies used to send out newsletters, whitepapers or catalogs with detailed usage guidelines on a regular basis. With emails becoming so prevalent, if you send something which is in print form, it will actually stand out. Though with people working from home, this can be a constraint. So use email and print both or whatever other vehicle suits you. The email could be 2 times a week while a newsletter or postcard could be twice a month and maybe a seminar once in a quarter..

Whatever is the combination of methods you choose, ensure that you are persistent with it. Using marketing automation tools, you can actually make a lot of this work in the background. That in itself will also create a brand & trust for you, because of your predictability.

Till next time then.

Carpe Diem!!!

P.S: If you are interested in getting a free copy of my 7 point checklist for B2B markets, you can ask for it, by filling in your details below.

← Back

Thank you for your response. ✨

Gatherers and Consumers – for marketers

Marketing, psychology

I have written about how most people would love to just gather information – just in case they need it sometime. As marketers – realising this basic human psychology helps get more customers, more leads or what have you.

So I end up buying a larger jar of my favourite coffee which has a free mug with it, rather than the one without the mug. Why? I might need the mug someday…..and with the coffee there’s hardly any cost to it and I would anyway consume the coffee so the larger jar is not of much consequence. So I end up gathering one more mug and end up buying more coffee than I needed to. I have gathered many such items in my house because smart marketers bundled things which I wanted to gather even though a lot of times I didn’t want the base product.

Books get consumed because we have an insatiable desire for reading. Again I am a ready example of buying the next book referenced by someone. I would like to have that book in my collection on my kindle. Almost 40-45% of the books in my collection have not been read at more than 10%. Since Kindle has made it so easy for me now to go and buy any book and get it delivered on my device instantly, I end up “scratching my itch” much more than I would, if I had to go out and physically locate a book in the book shop.

What does this mean for marketers. Different people have different “itches to be scratched”. You can increase the propensity of buying or reading in the specific set of people by offering this – so a mug with the larger coffee jar or a free book / report if they are willing to give their email id.

Obviously there’s a value that is attached in the transaction – if the person sees value, she will give her email id, if she doesn’t see value, she won’t. I attach value to the mug hence I am willing to buy the larger jar of coffee.

Identify the items that people in your category may be interested in gathering and use that to increase the opt-ins into your site or increase the sale of whatever you sell.

Till next time then.

Carpe Diem!!!