5.15.80: DISCIPLINE #5 - NARROWCASTING YOUR OFFER & BREAK MARKETS INTO SMALLER SLICES - WILLIAM EASTMAN

Today's Show focuses on Part 1 of 3 on how to slice up a market in finer slices so you can Narrowcast Your Offer. Next week will cover (2) Slicing Your Offer to Customers into Finer Offers, and close out Discipline 5 with (3) on How to Bundle Your Your Offer for increased sales and margins.

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Introduction
​We introduced the 5.15.80 Model at the beginning of the Season. It was a combination of research into small business performance and our practical experience from the last 2 decades. You could go to any area around the global with a market based economy and randomly select 1,000 companies, here is the distribution you would find: 5% or 50 companies that own their markets, 15% or 150 companies that are making money, and 80% or 800 companies that are barely surviving.

This series is about how to move from one level up and our concern in this series is the 15%, not how you get here which which is covered in the 80% series; the focus now is how to ACHIEVE market leadership and join the 5%.

LISTEN > ENGAGE > APPLY

Show Objectives
Today we start Discipline 5 of the 9. As we covered in previous shows each discipline is present in 3 parts. Today our focus is on how to take customer knowledge and make your offer finer or more narrow to better the customers needs.  Next week is the other option "Your Offer".

Key Issues - Owner Perspective:

1. What should I do to refine what we are selling to customers to improve the results?

What You Need to Know
​The Basics​

• Large heterogeneous market 
• Traditional segmentation [demographics, psychographics] vs RFM [recency, frequency, monetary value], 
  • Recency - more recent a purchase the more to target promotions, 
  • More frequent the more engaged and sissified, 
  • Monetary identifies heavy purchases from light purchasers

 
Application

• Heterogeneous market - Heterogeneous market is the  opposite of a homogeneous market. Heterogeneous market is a market with many variations in people, needs, wants, buying models, etc - so microsegmentation is easier. In a homogeneous market there is little variation and therefore more difficult when you are first entering into the segment.
• Traditional segmentation [demographics, psychographics]: At its simplest, customer segmentation is the process of dividing your customers into different groups based on their data. For marketing, the goal is to group people with shared characteristics into segments in order to effectively market to each group. There are four traditional types of marketing segmentation:
  • Geographic – Where they are
  • Demographic – Gender, age, income
  • Psychographic – Social class, personality type
  • Behavioral – How much they spend/consume, products/services they use
• RFM [recency, frequency, monetary value]: Recency, Frequency, Monetary (RFM) analysis uses recency, frequency and monetary based metrics to place customers into different stages of the Customer Lifecycle (Champion, Loyal Customer, At Risk, etc.). Customers are scored in a range for each metric (generally 1 – 5), based on their data. ​

What You Need to Do

1. Research your theoretical ideal customer/client and ensure the data/list you purchase has information related to purchases
2. Analyze the data and assign RFM Scores
3. Make sure your CRM and Accounting Software is collecting and storing the information to refine customer profiles based on actual purchases
4. Determine your best niche(s) - use your current customers as a guide - both their profiles and referrals
5. Think into ways to dominate that niche(s) - don't be afraid to copy the market leader - just make sure that once you get there the copying is over

Next Week - Part 2: Discipline 5 of 5.15.80: Narrowcasting Customers instead of Markets

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