Week 2 Strategy Series | Refined Focus for Profit Clarity - Who else is out there?

Sunday, January 15, 2017

 

A big mistake many community and business leaders make is that they don’t know how to target new customers or who to target.

 

To get information on people outside our business we can use secondary information. Secondary information involves perusing information that has already been collected by another party.

 

A very important piece of secondary information is to compare your customer list with the rest of the market. For locally focused business, this may be limited to a suburb or region. For a larger business with a presence in many regions, it’s structuring the same research many times over. B2B may look at industry sectors and their growth.

 

Population Statistics
 

United States of America

For Americans, your starting point would be United States Census Bureau. The U.S. Constitution mandates that a census be taken in the United State every 10 years. The Census Bureau also collects information for the Bureau of Labor Statistics. There is also the American Community Survey (ACS); an ongoing survey that generates data on jobs and occupations, educational attainment, housing and a range of other topics.

 

United Kingdom

A census of the population of the United Kingdom is taken every ten years, the last census being held in 2011. The Office for National Statistics (ONS) is responsible for the census in England and Wales, the General Register Office for Scotland (GROS) is responsible for the census in Scotland, and the Northern Ireland Statistics and Research Agency (NISRA) is responsible for the census in Northern Ireland.

 

Australia

My starting point in Australia is always the Australian Bureau of Statistics (ABS). The Australian census is conducted every 5 years, usually in years that end in a 1 or a 6 (so 2011, 2016, 2021, 2026, etc.).

 

The ABS website has information collected from the census which you can use to calculate your market penetration. There is also lots of other information where the ABS staff write on topics such as social trends, population growth, and industry. I love this site as it builds your confidence in getting a feel for the current trends and can often support or cancel out your ‘hunches’.

 

One way to consider gaps

One of my go to sections of the ABS site is Community Profiles. You can download all the census information and compare it with your list. For example, let’s say the business whose customer list we used as an example in the previous section was in the postcode of 2250. I would compare my customer list to the census information as such:

 

 

Can you see the amount of market penetration this business is having in postcode 2250? No wonder the 25-34 market is tough – there isn’t that many of them compare to the 35-44 years old market. However, the business could still foster future growth from this market.

 

Let’s say the business was in the suburb of Wyoming, NSW, which is in postcode 2250, and h­as a local focus. I would search for ‘Wyoming’ and download the census information just for this suburb, then compare to the customer list…

 

 

The market becomes even clearer. We can see that there is still terrific scope for growth. I’ve translated the above graph to describe the percentage of market share for that age group, then into another graph:

 

 

 

You can see that the 35-44 years old age group is still the core market at 46% locally. There is still lots of growth to be had in this core market. 25-34 years old still present as a growth market although there is more capacity (i.e. people) in the 45-54 years old market. Depending on what the business sells, it may decide which market to grow first.

 

If this business was looking to develop a new market, for example in the 15-24 years old, they may need to develop a new product or service to cater for this clientele.

 

Another way to consider markets

Depending on your business or your competition, another way to look at who else is out there is to consider who is not currently being served. 

 

For small or new businesses that can't compete with large or established competitors, the concept of niche marketing allows you to create a primary target market that is not being served by your competitors.

 

For example, a large competitor that has secured the family market may be ignoring women aged 35-50 years. To dig into the niches, read the tips below about getting specific. 

 

One Last Word on Target Markets

Many people get confused about target markets. Here is a simple analogy that describes the approach I used. I’ve used the term ‘target market’ like this picture of an archery board. The whole of the archery board is the MARKET.

 

 Some parts of the archery board are more valuable than the others. For example, the centre may be your target market because you see value in aiming for this particular market. That’s where you concentrate your focus. You practice to REFINE YOUR FOCUS TO REACH THE TARGET MARKET.

 

 

While amateurs ‘hope’ to hit it the bulls-eye and get maximum amount of points, professionals practice until they possess specific focus. This is when you break down your target market even further to get a SPECIFIC FOCUS. A professional will take that big yellow dot in the centre and carve it into smaller sections in their mind’s eye to further REFINE FOCUS.

 

This is the same as breaking your target market into smaller groups. For example, living in the same suburb you may have one 26-year-old female who is a single, university student working part-time in a café while another 26-year-old female is a stay-at-home mum with 2 young children and a husband who runs the family plumbing business. These two 26 years old have the same age, gender and postcode, but may have very different lifestyle, buying behaviours, income and interests. Have a look at the two example pictures.

 

     26-year-old university student                                  26-year-old stay-at-home mum

 

 

To get SPECIFIC focus, once you have isolated larger target markets use the categories listed below to gather further insight about your markets. The advantage to getting specific focus is that you will start crafting messages that suit your specific targets and minimise spending money on messages and markets that don’t respond.

 

 

Getting Specific about the Demographic

 

Examples include:

  • Age and Gender

  • Family life cycle

  • Education level

  • Occupation

  • Socioeconomic status (wealth, health and access to services)

  • Nationality / cultural identity

 

Getting Specific about the Geography

 

Examples include:

  • Postcode of customers

  • Travel distance and your distance from sourcing products

  • Transport and parking availability

  • Type of urbanisation (retirees, high density)

  • Distribution (local, national, global)

 

Getting Specific about the Psychographics

 

Examples include:

  • Personality and lifestyle

  • Values, opinions and attitudes

  • Interests and activities

 

Getting Specific about the Buying Behaviours

 

Examples include:

  • Benefit sought from your product or service

  • How often is the product or service used

  • Brand loyalty and creating ‘raving fans’

 

Getting Specific about the Technology

 

Examples include:

  • Types of technology used

 

Download: Mind Map on Analysing Customers

 

NEXT: Week 3 - What are we doing? (Part 1)

 

CONTACT: SHAYNE LESLIE 0412 241 773

shayne@integratedgovernance.com.au

 

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