Essential Information to Collect on Every Prospect and Customer By gathering key data about your customer base, you reduce your costs and improve marketing results by targeting only those prospects who are the most likely to buy from you.
Opinions expressed by Entrepreneur contributors are their own.
In The Marketing Plan Handbook, author Robert W. Bly explains how you can develop big-picture marketing plans for pennies on the dollar with his 12-step marketing plan. In this edited excerpt, Bly explains what type of information you need about your prospects and customers and why.
Big corporations as well as many small and midsize businesses routinely spend thousands of dollars on expensive and elaborate market research studies designed to help them get inside the minds of their customers. These can include mail and online surveys, telephone interviews, and focus groups .
Entrepreneurs running small businesses worry that if they don't do this kind of expensive market research, they won't know how to reach their prospects and will fail miserably. But for many small companies, the cost of even one study from one of the big market research companies would wipe out their entire marketing budget for the year.
Fortunately, there's a low-cost alternative to focus groups and other formal market research studies: the BDF formula. BDF stands for Beliefs, Desires, and Feelings. The BDF formula says that you can understand your prospect by asking yourself three simple questions:
1. "What do my prospects believe? What are their attitudes?"
2. "What do my prospects desire? What do they want?"
3. "What do my prospects feel? What are their emotions?"
There's no market research required, because you already know these things about your prospects or else you wouldn't have chosen to start a business that caters to them. For instance, a few years ago, a company that provides "soft skills" training to information technology (IT) professionals was promoting a new on-site seminar. They sent out a flier where the headline was the title of the program: "Interpersonal Skills for IT Professionals." It generated less than half a percent response. So the marketing manager and the owner brainstormed and asked themselves the BDF questions.
Here's part of what they came up with:
- IT professionals believe that technology is all important and that they're smarter than the nontechies they serve.
- IT professionals desire recognition, respect, and continuing opportunities to update their skill sets in new technologies and platforms to obtain job security and more money.
- IT professionals feel an adversarial relationship with end users: They're constantly arguing with them, and they resent having to explain their technology to us ignoramuses.
Based on this BDF analysis, the company rewrote the letter and tested it. This time, it generated a 3 percent response, outperforming the old mailing 6 to 1. And one-third of those who responded purchased an on-site one-day training seminar for $3,000. That means for every 100 pieces mailed, at a total cost of about $100, they got three leads and one order for $3,000—a 30-to-1 return on their marketing investment.
The headline they came up with based on the BDF analysis? "Important News for Any IT Professional Who Has Ever Felt Like Telling an End User "Go to Hell.' " Says the company owner, "The BDF formula forced us to focus on the prospect instead of the product (our seminar), and the result was a winning promotion." Amount of money spent on market research before the mailing? Not a dime.
The great sales expert and motivational speaker, the late Zig Ziglar, once said, "You can have anything in the world you want if you'll just help enough other people get what they want." But how can you help your clients and prospects get what they want if you don't know their needs and wants? Knowing your ideal client will help you determine what services to offer, when to offer them, how often, and how to price them. Who are the people that characterize your niche, and how will you find and recognize them? To answer this question, you need to develop demographic and psychographic profiles of the group.
For most businesses, selling is a multistage process. You:
- Get leads on people or businesses that might be interested in your service.
- After qualifying those leads, nurture a connection with those prospects in which you learn more about their challenges and generate interest in your ability to solve them.
- Follow up. Follow up. Follow up.
- Make a presentation with an offer.
- Close the sale.
- Grow your relationship in an attempt to serve and sell to them again.
At every stage of the sales process, there's a dance going on between you and your prospect. Selling requires getting and staying in step with your client. To do that, you need to know your ideal client.
Demographic data answer the question "Who are they?" You'll want to know information, such as age, race, ethnicity, gender, education, marital status, occupation, and income. Psychographic data answer the question, "What do they want?" Psychographics are psychological elements that might impact customers' purchasing decisions, such as personality, values, lifestyle, attitudes, interests, and opinions. Taken together, demographics and psychographics offer insight into your clients' hopes, fears, needs, desires, and aspirations. and how they might govern their purchasing behavior.
Questions that might affect how you sell to your niche clients include:
- Are the clients you want to serve international, national, regional, or local in scope?
- What percentage of the decision makers are male? Female?
- What's their average age? Generally, what generation do they belong to? Are they seniors, Boomers, Gen-Xers, Gen-Yers?
- What's their average educational attainment?
- What do they have in common?
- How do they differ?
- How do they get their information?
- To what social class do they belong? To what social class do they want to belong?
- Are they conservative, liberal, or independent thinkers?
- Are they environmentalists?
- Are they healthy, active, sports-minded people?
- What are their purchasing habits? How do they decide what to buy? Who decides? How many people influence the decision?
- How large are their expenditures? How often do they buy?
- Have they used a service similar to yours before, or will you need to educate them?
If your clients are businesses, you'll also want to know details about their companies:
- What business are they in?
- How large is the business? Is it homebased?
- Who are their best clients?
- What is the company's niche, or what is it known for?
- What are its sales?
- Where is it located?
- How many locations does it have?
- How many employees?
- What are its NAICS codes (replaced SIC codes as government classification of what businesses specialize in)?
- How stable is the business financially?
- Does the business spend on advertising and promotion? How much? Where?
- Why do they buy? To increase revenue? To reduce expenses? To maintain the status quo?
- What criteria do they use to evaluate the service they purchase?
