We are firm believers in the idea that the easiest folks to market to are the ones who have purchased products or services from you before. Seth Godin might call that marketing to your tribe. When you take care of your current customers and stop marketing to customers that don’t know you, you can then use those precious marketing dollars to more effectively market to the next valuable segment – customers that may not know you – but they know your strategic partners… and better yet, incentivize those strategic partners to recommend you to their current tribe.
So here is how you can identify your ideal customer and the strategic partners to approach:
- What do people really want to buy from me?
- What related products are they already buying?
Once you figure this out you will know who is more predisposed to purchase your products/services. Then seek out other businesses with the same customer base as yours. Come up with an incentive and great arrangement to encourage both of your customer bases to shop at both of your stores or create packages for your combined services. As a result, you both will have an expanded audience to market to while also generating added value for both of your current bases.
So, how do you figure this out? There is a great formula from Jay Abraham you can follow with great success.
LV = (P x F) x N – MC
Here’s what it all means:
- LV is the life time value of a customer
- P is the average profit margin from each sale
- F is the number of times a customer buys each year
- N is the number of years customers stay with you
- MC is the marketing cost per customer (total costs/number of customers)
Once you know how much you need to spend to attract a new customer, you will know how much of an incentive you can offer to a business to help attract new customers.
So, here’s your step-by-step process:
- Find companies who already have the customer base you are looking for.
- Negotiate an incentive for them to share that customer base with you.
- Focus your marketing resources to this group of predisposed customers.
If you need help working through this process, check out our FREE test drive for the most comprehensive system of marketing tools and resources.