Course 3.  Market Profiles  

Sales funnels are built from lead generation and advertising efforts in markets.  This course presents four general market profiles you can use to start your program. 

In this course you'll learn about:

1. Introduction to Market Profiles

2. The Non-Customer market

3. The First Time Buyer

4. The Customer

5. The Loyal Customer

Introduction to Market Profiles

Customers don't create themselves.  You have to sell them.  Before you sell them you have to find them and contact them.  This is typically done through advertising.  Who do you advertise or promote to?  Target markets. 

While target markets can be defined in many ways, our methodology is to introduce profiles of four of the most common markets.  We call these market profiles.  Each profile defines potential target markets for sales cycles.  From the profiles you create targeted lists.  You apply lead generation techniques to create sales cycles and ultimately convert sales cycles to transactions.

Here are the four market profiles:

1. Non-Customer Market

The Non-customer Market is people or companies who have never purchased from your company before.  They are non-customers.  This is the broadest market profile of the four profiles. 

2. First Time Buyer Market

First Time Buyers are new customers who purchase from you for the very first time.  They were formally non-customers. 

3. Customer Market

The customer market is repeat customers.  They have purchased from you more than once and may have purchased from you frequently and consistently.

4. Loyal Customer Market

Loyal customers have purchased from you for three years or longer.  They have a good working relationship with you and favor your products or services over your competitors.

Non-Customer Market Profile

The Non-customer profile is someone who has never been a customer of your company's.  These are the companies who are in a demographic range of variables you think make them likely prospects for your products or services.  As the non-customer market is so broad, you may have several different sub-markets within the category of non-customer markets.

Segment Your Non-Customer Market

What are the variables for selecting target markets?  We have to be realistic about our market selections.  There are many models being promoted to assist in market selection.  The reality is that five primary segmentations account for 90% of the differences in a market.  You can spend a fortune trying to learn the minor details.  Not smart.  Stick with these basics.

· SIC Code

· Geography

· Population

· Type of Business

· Employee Size

· Target Market Selection Variables

1.         SIC Codes

Standard Industrial Codes is a very common segmentation tool.  The North American Industry Classification System has replaced it, however.  I still use SIC codes and will for a while.  The new products and information for the NAICS will take a while to diffuse into the market.

Here is a site you can use to search the four-digit Standard Industrial Codes.  http://www.osha.gov/oshstats/sicser.html.  If you want more information on the NAICS here is the link:  http://www.ntis.gov/product/naics.htm

The following is a sample table with the primary categories of SIC codes.  The SIC codes cover all categories of business.

SIC     DESCRIPTION

            Agriculture, Forestry, Fishing

01        Agricultural Production - Crops

02        Agricultural Production - Livestock and animal specialties

07        Agricultural Services

08        Forestry

09        Fishing, Hunting Trapping

            Mining

10        Metal Mining

12        Coal Mining

13        Oil and Gas Extraction

14        Mining and Quarrying of Nonmetallic Minerals, except fuels

            Construction

15        Building Construction

16        Heavy Construction other than building construction

17        Construction - special trade contractors

           Manufacturing

20        Food and Kindred Products

21        Tobacco Products

22        Textile Mill Products

23        Apparel and other finished products made from fabrics

24        Lumber and Wood Products, except furniture

25        Furniture and Fixtures

2. Geography

Geography is the most common method for segmenting markets.  State, county and city are three different steps you would take when segmenting by geography. 

Washington State Counties

Adams County                          Lewis County                              

Asotin County                           Lincoln County                            

Benton County                          Mason County                             

Chelan County                           Okanogan County                        

Clallam County                          Pacific County                             

Clark County                             Pend Oreille County                     

Columbia County.                      Pierce County           

Cowlitz County                          San Juan County       

Douglas County                        Skagit County           

Ferry County                             Skamania County      

Franklin County                         Snohomish County    

Garfield County.                        Spokane County.       

Grant County                             Stevens County         

Grays Harbor County                 Thurston County        

Island County                            Wahkiakum County   

Jefferson County                      Walla Walla County   

King County                              Whatcom County       

Kitsap County                           Whitman County        

Kittitas County                          Yakima County     

Klickitat County                                      

3. Population

Population is another common segmentation variable.    Listed below are the populations for Washington State counties.  Whatever market you want to segment you want to make sure there is a population that can support your efforts.

Whatcom County       152,512     

Snohomish County     546,102     

Pierce County            657,272     

King County              1,619,411   

4. Type of Business

Type of business allows you to target certain types of businesses.  Most people target corporations but within corporations you may want to select only head office locations.  This table gives you an example of the types of businesses available.

• Sole Proprietor                          
• Corporation                               
• For Profit                                  
• Non-Profit                                 
• Head Office                              
• Branch Office                            

5. Employee Size

Employee size is my favorite tool for segmenting a business market.  I think it tells a lot about a business and its potential for buying your products. 

• < Less than 5 employees          
• 5 to 9 employees                      
• 10 to 19 employees                   
• 20 to 49 employees                   
• 50 to 99 employees                   
• 100 to 500 employees               
• 500 to 1000 employees             
• 1000 plus employees       

First Time Buyer Market Profile

The First Time Buyer is a person or business has purchased the product for the first time. 

A First Time Buyer is a very unique relationship.  It is actually the most perilous relationship in your company.  The First Time Buyer has taken action but is generally not committed to your company or your product.  The value of your product has yet to be fully adopted.  The relationship is still tenuous and risky.  You pay to acquire new buyers through your advertising, promotion and selling.  A primary goal for First Time Buyers is to re-enter them into a sales cycle to convert them to customers.

It's important to segment out First Time Buyers from repeat purchasers to better manage the relationship.  Customer service needs to be superior if you are going to create more sales opportunities.

Here are things to know about your First Time Buyer market:

What product or service are they purchasing most?

Why are they buying from you versus the competition? 

What percentage of First Time Buyers become repeat purchasers? 

How long is the average sales cycle from first contact to transaction for First Time Buyers?

What demographic pattern can you identify for all or nearly all First Time Buyers?

What do First Time Buyers say is the reason they purchased from you?

Customer Market Profile

The Customer Market Profile consists of companies or people who have purchased from you more than once. Customers presumably have a deeper relationship with your company than First Time Buyers.  The First Time Buyer doesn't really know you.  The customer does.  There are several good methods for segmenting your customer base.  Here are a few of the categories used to separate your customers and identify the most profitable relationships.

Frequency Frequency is how often a customer buys your product.  Please review the following time frames that could apply to the frequency of your customer base.

Recency Recency is how recently your customer bought your product.  Please review the following recency parameters to determine which one applies to your customer base.

Duration Duration is how long your customer has been buying your product.  Please review the following time frames to determine which one's apply to your customer base.

Intensity Intensity refers to how much your customer spends on your product.  Please review the following amount of expenditure to determine which applies to your customer base.

Loyal Customer Market Profile

A Loyal Customer is a customer with a successful track record with the company and has been purchasing from you for three years or longer.  The Loyal Customer is the embodiment of all we hope for in marketing.  The Loyal Customer does not purchase from competitors and maintains a successful relationship with you.  You, in turn, offer the Loyal Customer the necessary incentives to retain the business. A strong relationship between the buyer and seller forms. 

Loyal Customers are your best customers.  They have the best track records in terms of frequency, recency, duration and intensity.  They provide positive value return in the form of referrals and testimonials.  A primary goal of every business is to build loyal customers.  The more loyal customers we have the more we take control of our market.  It requires you to be very good at what you do.

We want to ask questions about the Loyal Customer market profile similar to the First Time Buyer:

What product or service are they purchasing most?

Why are they buying from you versus the competition? 

How long is the average sales cycle from first contact to transaction for Loyal Customers?

What demographic pattern can you identify for all or nearly all Loyal Customers?

What do Loyal Customers say is the reason they purchase from you for an extended period of time?

Engaging the Market Profiles

The Market Profiles represent contact records you enter into a database or contact manager.  You create sales cycles with contact records by engaging the leads with advertising or lead generation methods.  This begins the sales stages.  A lead is contacted and interest is determined.  A prospect is created when there is interest and meetings take place.  Ultimately a proposal is provided and a transaction is completed. 

Non-customers, First Time Buyers, Customers and Loyal Customers engage in sales cycles.  Whenever an opportunity for a transaction is created a sales cycle begins. 

Summary

In this course, we introduced four market profiles to focus sales funnel activities towards.  The four market profiles are:

1. Non-Customer Profile

The Non-customer profile is someone who has never been a customer of your company's.  It is companies who are in a demographic range of variables you think make them likely prospects for your products or services.  The following categories are commonly used to segment this profile:

·         SIC Code

·         Geography

·         Population

·         Type of Business

·         Employee Size

2. First Time Buyer Market Profile

The First Time Buyer is a person or business who has purchased the product for the first time.  A First Time Buyer is a very unique relationship.  It is actually the most perilous relationship in your company.  The First Time Buyer has taken action but is generally not committed to your company or your product.

3. Customer Market Profile

The Customer Market Profile consists of companies or people who have purchased from you more than once. The following categories are commonly used to segment this profile:

·         Frequency

·         Recency

·         Duration

·         Intensity

4. Loyal Customer Market Profile A Loyal Customer is a customer with a successful track record with the company and has been purchasing from you for three years or longer.  Loyal Customers are your best customers.  They have the best track records in terms of frequency, recency, duration and intensity.  They provide positive value return in the form of referrals and testimonials.  A primary goal of every business is to build loyal customers.