Marketing

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.

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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.

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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!!!

TRUST & FEAR IN B2B – 2

B2B, education, education, Fear, Marketing, Trust

In my earlier post on this topic I spoke of the challenge for a new vendor to enter into an organisation. But there’s a positive side of this story. Once you enter the organisation and do a good job and the customer starts trusting you, then you will stay in that organisation for a very long time. Decisions in organisations are rarely impulsive, therefore they will always prefer to go with the vendor who is an incumbent and whom they trust.

So how do you build trust & reduce the fear-

  1. Ideal situation is when you have enough other customers vouching for your product or service. If they are from the same industry as the prospect you are targeting, even better.
  2. Provide continuous education on what’s new and what they could be missing – there are three things in this sentence. First is “continuous” – you have to be reaching your prospects regularly and creating an impression in their minds, so that when the time comes and the incumbent is not in a position to provide them the service, they reach out to you. The Second item in the sentence is – “What’s new” – keep talking about the new technologies, new case studies etc. so that the customer understands that you are doing a lot of work and others are trusting you. And the last item is on “What they could be missing” – with their existing supplier – this is to create a wedge, start a cycle of dissonance with the incumbent. This could be a simple thing like talking about how at each of your other customers’ premises you provide a dedicated project manager to ensure smooth operations. Now if the incumbent is not providing this facility, then the customer will start getting a feeling of missing on a service.
  3. Always be upfront in what you can do very well and what you can’t do. When you first get a chance – it could be a trial or a Proof of Concept, never do anything in this phase which is not your best item. Only when the prospect gets convinced at this stage, will they decide to move forward with you.

Out of the three points above, with marketing you can systematise the second point and ensure that there is constant education happening for the prospects. This background activity will slowly result in your name becoming more familiar. With familiarity, some amount of trust starts developing. As the trust starts getting built, they may start inviting you to discuss on things which they are coming up with to see if they can accommodate you.

Till next time then……

Carpe Diem!!!