Segmenting your market into specific niches where you have excelled previously can have a positive effect on your business.
A market segment is a group of companies or organizations with one or more characteristics in common that cause them to have similar product and/or service needs.
- Average dollar sale
- company size
- trust in your expertise
- growth industry
- who or what job title is your initial point of contact
- on-going work
- values professional services
Once you have identified the key characteristics that your best clients have in common, dig a little deeper to identify other characteristics that may reveal your most profitable clients. You need to clone your best client.
Your best client will tend to spend more? You can focus the same effort on a random segment of prospects, but their average spend may be about half of what the average “Best Client” spends. So the same amount of effort yielded twice the sales volume. Don’t waste time chasing prospects that need your services. Find the ones who want it. Determine which of these businesses buy the most.
A useful exercise is segmenting your market by Vertical, or industry type. Analyze characteristics such as employee numbers, revenue size, number of locations, years in business, and so forth. From this, you can create a profile of your typical “Best Client”, rather than specifically targeting other clients that may fit that profile.
This is easy to do if you have a decent client base, but what if you have just one good client you’d like to clone? You have to start somewhere. An example of a “Best Client” might have the following characteristics:
- 100+ employees
- Multiple businesses under one roof
- Marketing director responsible for advertising and marketing, but no in-house design team
- Provided steady, on-going work
- Always paid on time
- Never tried to negotiate a lower rate
- Sent me a gift basket each Christmas
Some of these characteristics you can’t know until you start doing business with a company, yet it’s a good thing to include them on your list. Remember, if you don’t know what you want, you’ll end up taking whatever you can get. If being paid on time is important, then you might decide to fire the client that doesn’t.
Targeted marketing works because it makes your efforts more effective. Your lead generation efforts will be significantly increased when targeting companies where you have had previous success. Your confidence will be increased, and you will have stories of how you were able to add value to those companies.