How to Increase Your Conversion Rate In 5 Easy Steps

How to Increase Your Conversion Rate In 5 Easy Steps

Now that your target prospects are answering your call to action, how can you get them to actually become your customers?

A big part of your focus to date has been on identifying who your ideal customers are, deciding how to reach them, and how to communicate with them so that they take action and contact you.

Converting leads into customers is your next point of focus, and step two of the five-step process. You’ve spent so much time and money enticing the right people to raise their hands and identify themselves that now all you and your staff need to do is convince them to become your customers.

Generally, how your potential customers perceive your business and your staff, as well as how much trust you can build and how fast you can build that trust are the two key factors that impact conversion rates.

Secondly, the strength of your sales process and scripts as well as the level of risk involved in purchasing your product or service also have a powerful impact on conversion rates.

Here are the 5 Steps

  • How your conversion rate impacts the bottom line
  • How to measure your conversion rate
  • How to evaluate your conversion rate
  • How trust and qualified lead generation impacts conversion rates
  • Strategies for improving your conversion rate

Your conversion rate is the second factor in the customer equation.

conversion rates website

A conversion rate is simply the number of transactions divided by the number of leads during a specific time period. It’s a ratio between the number of people you attracted with your lead generation strategies, and the number of people who purchased from you and became your customers.

So if 150 people come through your store in a day, and 50 of them make a purchase, your conversion rate is 33% for that day.

# TRANSACTIONS / # LEADS X 100 = % Conversion Rate

Converting leads – which is essentially the sales process – is likely the core of your daily business efforts. You’ve spent time and money setting up lead generation systems and strategies, so it stands to reason that you should put equal time and energy into converting those leads into loyal customers.

I’m going to show you in a few minutes how you can improve your conversion rate with a few simple strategies, but first I want to show you how increasing your conversion rate alone will have a dramatic impact on your bottom line.

Using the five-step formula, here is an example of how a 10% and 30% increase in conversions can impact your total profit.

Starting Point 10% Increase 30% Increase
Leads 4,500 Leads 4,500 Leads 4,500
Conversion Rate 30% Conversion Rate 33% (10% increase) Conversion Rate 39% (30% increase)
Customers 1350 Customers 1485 Customers 1755
Transactions 1.3 Transactions 1.3 Transactions 1.3
Average Dollar Sale $140 Average Dollar Sale $140 Average Dollar Sale $140
Revenue $245,700 Revenue 270,270 Revenue 319,410
Margins 24% Margins 24% Margins 24%
Profit $58,968 Profit $64,864.80 Profit $76,658.40

Do You Know Your average conversion rate for your business?

To figure out your conversion rate, choose a specific time period (day, week, month, campaign) and then divide the total number of sales transactions by the number of people who inquired about your product or service (leads) and multiply by 100. This is a percentage value of your conversion rate.

For example, 50 transactions / 150 leads x 100 = 33% conversion rate.

Now, if I wanted to look at conversions over a specific time period, the rate would vary:

Leads Sales Conversion Rate
Day 150 50 33%
Week 910 286 31%
Month 4050 1196 29%

If you’ve been tracking your leads over the past few weeks, you’ll be in good shape. All you may have to do is look at your lead tracking sheet, and divide into it your total number of sales over specific time periods. You’ll be able to analyze what your conversion rate looks like over the course of ad or direct mail campaigns, as well as over various weeks in the month.

If you haven’t started tracking your leads, you’re going to have to start in order to understand what your true conversion rate is. In my experience, many business owners overestimate what this percentage actually is, so I feel this is an important step in the process.

Keep track of the following items in your conversion rate measurement sheet:

  • Start date and end date of the measurement period (by ad campaign, week, or month)
  • Total number of leads (divided by source – telephone, in store, online, etc.)
  • Total number of sales transactions
  • How trust and qualified lead generation impacts conversion rates

If you’re starting to track leads and sales today, by the end of a week you’ll have a reasonable understanding of where your business stands.

How do you evaluate if your conversion rate is “good” or not?

customer price

I have clients ask me this all the time, ‘Once you know what your conversion rate is, how can you tell if it’s “good” or “profitable”?’

Unfortunately, the answer isn’t a black and white one. The truth is that conversion rates vary and depend on the product, service and customer base. Different businesses can have dramatically different rates, yet both rates can mean the respective companies are highly successful.

For example, a thriving dollar store may have a conversion rate of almost 80%, while a profitable furniture store may have a conversion rate of 30%. Other businesses might have rates of anywhere from 4% to 99%.

You can put it into perspective if you think about how differently these businesses operate. Dollar stores generally have a high volume of foot traffic and offer a wide variety of products. The price point is low, and most people who walk into a dollar store buy something.

Furniture stores, on the other hand, offer products of a higher value that usually require more thought prior to purchase. The store generally advertises to attract leads that are looking for specific items and features. Lastly, the product requires a much more substantial investment.

So, instead of focusing on how close your conversion rate is to 100%, you need to think of conversions as relative to your break-even point – either for a campaign or for regular business operations. To do this, you need more information than the rate itself. You need to know how many leads you need to convert into customers to see a return on investment. You need to know how much money each lead costs you, on average how much they spend, and how much of their spend is actual profit.

For example, if you have $4,000 to spend on advertising and you want to see $20,000 in sales, will a 20% conversion rate be enough to do the job?

To answer this, you need more information on other measures in your business. You need to know your average dollar sale and average customer acquisition cost. In this example, let’s say your average dollar sale is $42 and your average customer acquisition cost is $2.50. (You’ll look at customer acquisition costs in the next post).

If you take your $4,000 advertising budget and divide by your $2.50 customer acquisition cost, you’ll expect to generate about 1,600 leads.

So 1,600 leads with a 20% conversion rate would equal 320 sales – not bad. Now, take the 320 projected sales times the average dollar sale of $75, and you’ll get $24,000 in revenue. That’s a reasonable ROI for a $4,000 investment!

But is the 20% conversion rate a ‘good’ one? To answer this, you’ll have to factor in your profit margin to determine the answer. You wanted to achieve $20,000 from your $4,000 advertising investment.

Let’s say your average profit margin is 45.3%. So, on each $75 sale, you made $34 profit. So, let’s look at your actual profit after costs:

320 sales x $34 profit per transaction= $10,880 in take home profit.

So, when the rest of your business measures are factored in, you actually only achieved a 272% return on investment, which is about half of what you were targeting. Therefore, in this case, a 20% target conversion rate isn’t necessarily a strong one for your business.

Now, before you dive into any conversion rate boosting strategies, focus on building trust and generating qualified leads – the cornerstones of a profitable conversion rate.

You likely already know that trust his a huge factor in any exchange with a potential customer. When you first learned about sales and the selling process, you learned about building trust and rapport with the people who are giving you their money.

So, trust is therefore a big factor in having a healthy (and profitable) conversion rate. Your prospect needs to trust in the value of your offering, as well as the credibility of the business and the knowledge of the people who work there.

The issue here, of course, is the length of time it takes to truly establish trust, or credibility. With all your new leads – practically strangers – walking through the door and picking up the phone, you need to establish instant trust and credibility in order to make the most of the time you spend with each prospect.

The other important point I want to make is about the role that qualified leads have in your conversion rate. It’s one thing to have hundreds of leads contact you on a daily basis, but if they’re not qualified leads, they’re less likely to buy from so, and thus potentially wasting your time and squashing your conversion rate.

Here are five ways you can boost your conversion rate with little improvements to your business.

conversion rate optimization

1. Build instant trust.

Use testimonials. Ask happy customers to write testimonials about their experience at your business. Use their words (or even their whole letters) in your marketing materials, or post them in your place of business. Testimonials boost confidence in what you’re offering and establish trust in the eyes of prospects.

Showcase your good news. Post awards, accolades, media articles and other ‘proof’ of your credibility around your business and on your website.

2. Create an image of quality.

Consider the appearance of your staff. How do you and your staff members dress? Does your appearance communicate the right message to potential clients about your offering? You don’t need to show up in a suit every day, but make sure everyone’s appearance is professional and appropriate for your business.

Improve the perception of your business. This includes the physical state of your place of business, as well as the quality of your marketing materials and the quality of the service customers’ receive when they purchase from you.

Give merchandise displays a boost. Can you make your products look more attractive through the way they’re displayed or arranged? Put complementary products together, and create feature product displays to create variety and interest.

3. Train and develop your staff.

Give staff conversion targets and incentives. Remember that you’re not the only one who can contribute to an increase in conversions. Involve and support your staff in tracking and boosting conversion rates. Give them individual targets, and incentives for meeting them.

Review and improve sales process. Everyone can improve their sales skills, and refine the process they use to close sales. Take an opportunity to watch and give feedback to your staff members, or hold a brainstorming session to discuss what techniques, phrases, objections are most effective when selling your product or service.

Develop and continuously update scripts. If you’re not using scripts, it’s time to start. If you are using scripts, make sure you’re revising and improving them on a regular basis based on what you and your staff experience during the sales process.

Focus on customer education instead of sales. Face it, no one likes to be ‘sold’ to. Focus your sales process on building a relationship with and educating your customer on the benefits and solutions of your offering. The more they learn, the more they’ll believe what you have to say, trusting the business enough to make a purchase.

4. Improve your offering.

Increase quality, exclusivity or range. Can you improve the quality of products or services that you offer? Carry a more exclusive product, or extend your range of products? Take a look at your merchandising mix and service menu and identify areas where you can expand or specialize.

Make great offers. Strong offers can also serve as an incentive for a potential customer to complete the sale. Offer great perceived value, or exclusive and time-sensitive products or services, and you’ll see a spike in your conversion rate.

5. Take away purchase risk.

Provide free trials and demonstrations. Allow your customers to test out your product or service for free, with no obligation to purchase. Or, offer free demonstrations so your customer can see the benefit or solution your product or service provides.

Guarantee product or service performance. Take away the purchase risk from your potential customer, and you’ll have a powerful strategy for closing sales and increasing conversions. This is also an immediate trust and credibility booster – you are so confident in your product or service’s results that you’re guaranteeing them.

Work with your staff on a daily or weekly basis to consistently measure and increase conversion rates.

converstion rate

Post a calendar in the staff room or common area, and track your targeted and actual conversion rates on a daily and weekly basis. This will give you and your staff a visual reminder of the company’s goals, as well as an indication of how the team is performing.

You don’t work in your business alone, so involve and motivate your team to support you in growing your business. Give them incentives and help them develop their sales skills, and I promise you’ll see an impact on your conversions.

The next step is about customer loyalty – how to keep your clients coming back to make new purchases, instead of continuously trying to buy new clients.

As always, let me know if you have any questions.

Good Luck!

 

How to Use Testimonials Strategically

How to Use Testimonials Strategically

So now you have a pile of glowing customer testimonials. What’s next?

Testimonials are enough to convince people for now. – Alex Chiu

Well, obviously your next step is to use the testimonials you solicited. Generally, you want to place them in your marketing materials and other places where prospective customers will see them.

But you probably have a variety of testimonials, in e-mail, letter and verbal format. These testimonials probably speak to a wide range of aspects of your business, and your product or service offering. You may have some that sing the praises of a particular product, and others that rave about your customer service standards. Some might be from customers, others from the media.

We have created this blog to show you how to use your testimonials strategically and to get the most out of their power. Testimonials may be more believable than sales copy, but they way you use them in your marketing is the same: with a clear purpose in mind.

In this post we will cover:

  • Why testimonials need to be used strategically
  • How to choose the right testimonials
  • Where to use testimonials in your business
  • How to make the most of your testimonials

Testimonials need to be used strategically to maximize their value and their impact on your business.

Testimonials website www.wequipu.com

Let’s say you were reading a brochure about a new product that you were interested in purchasing. The copy describing the product claims that it is the ‘best product you’ll ever use’ and that the quality ‘far exceeds the competition.’ That might be true, but I bet you’re a little skeptical.

Next to the sales copy, there is a quote from a customer that reads, “Exceptional customer service. The salespeople made every effort to ensure I found what I needed, and left the store happy.”

What does that do to increase your confidence in the product? Does it help to eliminate some of your skepticism? Probably not. It’s just telling you that you’ll be treated well in the store.

In order for you to really harness the power of testimonials in your marketing materials, you have to put some thought into where you place them and why. They need to support the message you’re trying to communicate, even though the words aren’t yours. They need to make sense in the context of where they’re used.

Each time you use a testimonial you need to decide what you are trying to accomplish or what message you are trying to support.

Testimonials have the power to achieve a variety of things for your marketing and customer retention programs. They can:

  • Overcome buyer skepticism. Use a testimonial to shine light on your credibility, or on the quality of your product or service. This type of testimonial builds trust and overcomes natural barriers. In the example above, the testimonial could have read: “Best product I’ve tried in this price bracket – and I’ve tried many. Great value for money, and no shortcuts on quality.”
  • Overcome objections. Your readers are going to be naturally skeptical of any claims, promises or bold statements. As much as you can back yourself up with facts, a third party experience or opinion will work wonders to overcome unspoken objections in the customer’s mind. “It all sounded too good to be true, but when I used the hair straightener, there was more shine and less breakage.”
  • Simplify or make a point. A customer’s personal experience with your product or service will work to persuade your audience like a story does. Complex explanations or abstract applications will make more sense when applied to real life examples. This works well with highly technical products or complex services where the customer doesn’t need to understand all the details.
  • Break up and maintain interest in long copy. Readers have short attention spans and they will get bored unless you can change up the structure on a regular basis. Quotations and testimonials will break up the tone or voice of the copy, and sound like the customer is reading dialogue, which will keep them engaged. You can also break up paragraphs with a testimonial that supports the point you have just made.
  • Target anxieties or doubts. Just like they can overcome skepticism and objections, they can also overcome hidden anxieties or doubts at each stage of the sales process. Anticipate questions like “is this worth my money?”, “do I really need this?”, “can I trust the guarantee?” and “will they sell my information?”, and place testimonials accordingly.

When you have established what you’re trying to do with the testimonial, choose credible ones that will support your purpose.

testimonial www.wequipu.com

When you’re going through your stacks and stacks (hopefully!) of customer testimonials, it can be hard to choose which one will suit your purpose best. I’m usually so proud of mine that I want to use every word of each of them, but of course that’s not possible.

Use these guidelines when choosing your testimonial:

  1. Is the testimonial credible? (includes customer’s full information)
  2. Does the testimonial describe or prove the top benefits or results of my product/service?
  3. Is the testimonial detailed and specific, and describe their experience as a customer?
  4. Is the testimonial from an expert source or organization that will be recognized?
  5. Does it describe the problem the customer was experiencing before the purchase and the relief or happiness they experienced after?

Of course every testimonial won’t be all five of these things, but they’re a good way to identify strong testimonials that will have impact.

Remember that more isn’t always better. Choose quality over quantity, and try to support what you’re saying, not distract from it. A single strong testimonial will have more impact than a page full of mediocre ones.

Now, make the most of each testimonial you choose.

Chances are, you won’t get testimonials in convenient paragraphs of copy that support what you’re trying to convey. Usually, they’ll be in letter form, and potentially a few pages in length.

Sometimes you’ll use the entire testimonial, perhaps on your website or posted in store. However, most of the time you’ll need to choose an excerpt that will fit your needs. You can always use a different part later. To identify what part of the testimonial should be used, ask the following questions:

  • What is the most convincing part of the testimonial?
  • Is the author a recognizable name?
  • Is there a specific sentence or paragraph that sums up their experience?
  • Are there several sentences or paragraphs that will be of use?

For example, if you need to group testimonials under a specific category, like “Here’s what our customers had to say about their experience,” you’d only need to pull sentences that speak to customer service. If you’re looking for a killer testimonial that will speak to product quality and service standards, you may want to pull a full paragraph and let it stand alone.

You can use testimonials in your business wherever your customers can see them. Here are some suggestions for placement:

Put them on your website.

  • Create a page of your website dedicated to customer testimonials.
  • Include testimonials on every page of your website – especially the pages that generate the highest traffic.
  • Put your best testimonial in a prominent location on your homepage – in sidebars, call out boxes or above the headline – and put a new one up on a regular basis.
  • Use testimonials to break up long bits of sales copy throughout your website.

Put your best 25 to 50 letters in a waiting room book.

  • Keep a binder or album of testimonial letters, printed on source letterhead, for your prospects and customers to flip through.
  • You can keep this binder in the waiting room, your office, your point of sale, your boardroom, or anywhere else you prospect may have an opportunity to look at it.
  • This strategy allows customers to build trust while-they-wait, and usually results in prospects being more open to what you have to say.

Hang your best testimonials in your store or office.

  • Frame your best testimonial letters (again, printed on letterhead) and hand them up in your business or your office. Hang several in a row for maximum impact.
  • Even though your prospects may not read each and every one, the presence of testimonials will send the message that you have happy customers. They may even want their company names on the wall too.

Put them in your advertisements.

  • Testimonials are highly effective in advertising. Use short, clear, purpose focused testimonials for the best results.
  • Avoid cluttering up your ad with paragraphs of testimonial copy – save that for your website and brochures.

Put testimonials in your direct mail.

  • Let the words of others speak for you when sending a direct mailing. Attach a page of testimonials to a direct mail letter, or include them on postcards or brochures.
  • Since you can’t physically be there to sell your product, the use of testimonials in direct mail campaigns can boost response rates.

Partner with a complementary company for a joint mailing.

  • Send a joint mailing with a company that offers a product or service that is complementary to yours, and you’ll gather a host of qualified leads.
  • The way it works is you send a letter to your clients on your letterhead introducing and offering the other company’s product or service, and they do the same for you. Since your existing customers already trust your business, and you endorse your partner company, the letter acts as a testimonial.

Use video testimonials on your website, in presentations and in store.

  • Put videos of happy customers on your website for browsers to find when they’re looking at your offering. Videos tend to be more interactive, and may be seen by more people than plain text.
  • If you attend trade shows or sales presentations, keep video testimonials on a CD or DVD to play on a loop or in strategic points of your presentation.
  • Transcribe the audio to written testimonials that can be used in your print collateral, and make the most of your customer’s comments.
  • In your marketing materials, invite customers to visit your website to view videos of other client’s experiences and thoughts after using your product or service. It’s always more interesting to see something live than read it on paper.

When you put some thought into how you use testimonials, they will have a stronger impact on your target audience.

Remember that the key to maximizing the power of your testimonials is making sure that your prospects see them when they need to see them.

You want to use testimonials to back you up when you’ve said or claimed something unbelievable, or are trying to build credibility. You want to place them so they’re seen right before you ask for the close, or the call to action. Let others speak for you when it matters the most.

To Your Success!

How to Define Your Target Market

How to Define Your Target Market

Blog-a-Lesson Checkpoint:

  • You have calculated what your time is worth on an hourly basis.
  • You are aware of the time of day that you are most productive.
  • You have implemented five strategies for improved personal time management.

Determining your target market is your first job as a business owner

This Blog-a-Lesson officially marks the beginning of Step One of the five-step process, which shows you to how to bring a high number of qualified leads into your business.

Qualified leads are the group of people who are most likely to buy from you – they have a current need, problem or desire that your offering will solve or serve. These people are your target market, or ideal customers. Qualified leads are generally easier to convert into customers, so a high number of qualified leads mean a high conversion rate and, of course, more sales.

A great example of this going wrong… you own a hamburger business and are standing outside a large convention, waiting for the lunch-break to take advantage of a huge rush of people in a short period of time (a great way to do business) to give away small hotdogs to generate customers for your business down the road. You have prepared all your toppings, flyers with simple directions, arranged for staff to handle the rush and stocked up mightily to ensure you do not miss a single prospect. The group comes out and you manage 25 free hot dogs given away when you were expecting 500.

What went wrong? You did not realize the convention was a health and wellness group comprising of 95% vegetarians… morale of the story; if you are talking to the wrong audience it doesn’t matter how good your offer is – you are wasting your time. Talking to your target market is absolutely CRITICAL to successful marketing.

So, your first job as a business owner is to figure out who your target market is, and how the people in it think and behave.

In this Blog-a-Lesson we will cover:

  • How your target market influences your marketing choices
  • A step-by-step process for identifying your target market
  • Types of target markets
  • Examples of target markets
  • Market research strategies

Generating qualified leads will make it easy to boost your conversion rate, because your prospects will already want or need your service.

A target market is simply a group of people with something in common – things like age, gender, opinion, interest, or location, – who will purchase a particular product or service. Your market can be broad or specific in scope, and it is unique to each business or industry.

Knowledge and understanding of your target market is crucial to the viability of your business. You have to know if there is enough demand for your product, or enough interest and need for your service. You have to know how to communicate with your customers, and understand their thoughts and behaviors.

Without a comprehensive understanding of your target market, you can’t make smart choices about your front end offers, marketing strategy, pricing structure, and product or service mix. It’s kind of like driving a car with a blindfold on – you’d be headed for disaster.

In addition to being essential to confirm assumptions and understand purchase motivations, market research is something you will need to get into the habit of doing on a regular basis to monitor trends and stay ahead of the competition. Identifying your target market is not always easy, but I promise it will pay off in spades, so stay committed to your efforts as you work through this post.

Let’s start with an easy, step-by-step process to identify your target market.

You likely already have an idea of who your target market is – or who you want it to be. Start by describing who you think your target market is in two or three sentences on your pad of paper.

As you work through this process, you may find that you were correct in your assumptions, or not. Either way, this post will discover invaluable information about your audience.

When you set out to identify your target market, you need to find the group of people that has these four characteristics:

  • They have a particular need, want or desire.
  • They have the financial ability to purchase your solution to their need, want or desire.
  • They have the power to decide to purchase your product or service.
  • They have access to your business, through a physical location, Internet or catalogue

First, take a look at what it is you offer or provide your customers.

To find the group of people with the characteristics listed above, you first need to answer the following questions about your product or service:

identifing-your-target-market

Now let’s look at the demographic and psychographic characteristics of the people that need, can afford, access and decide to purchase your offering.

Demographics

Answer the following demographic questions about the people who use your product. Some of the demographic information in this table may be less important than the rest (like ethnicity or religion) depending on your product or service and the market your are trying to attract.

target-market-demographics

Psychographics

Answer the following questions on your target market’s psychographics. Psychographics are the qualitative characteristics of your target audience, like personality, values, attitudes, interests, or lifestyle. These characteristics can give you a lot of insight into how to best interact and communicate with your target market.

target-market-psychographics

So, now that you’ve gathered all this information, what does it tell you about your ideal customers?

You’ve done enough research now to create a picture of who you think your ideal customer is. Being as specific as you can, write a 1-2 sentence statement about your target market.

For example:

  • My target customer is a successful young professional; a middle-class man aged 20 to 35, who is single, makes more than $50,000 per year, and is physically fit. He is university educated, and has an active interest in economics and politics.
  • My target market is affluent new mothers; married women with children under five years old, between the ages of 25 and 45, and have a household income of at least $100,000 annually. She is the trend and opinion follower, and her purchase motivations are driven by her peer group.

Now that you’ve made some educated assumptions about who your target market is, you’ll have to use some market research strategies to confirm them.

Market research is the study of a particular group of consumers – or markets. It is one of the most valuable activities you will work on as a business owner, since it keeps you connected and informed about your customers thoughts, motivations and behaviors. Market research also minimizes risk and assumption-based decision making, which will improve the success rate of everything you do for your business.

When you begin your market research, you need to start out with a clear question that you want answered. Otherwise, you’ll quickly get off track and fail to end up with the information you really need. Think about questions like:

  • Am I right about my target audience assumptions?
  • Is my target audience interested in my new product or service?
  • I need more information about my target audience’s purchase motivations
  • What new trends are my target audience following?
  • What recent economic developments have impacted my target market?
  • How can I improve my customer service?
  • Has my target market changed in the past year?

Market research needs to be conducted regularly – regardless of how long you have been in business, or how well you know your target market. Trends shift, and environments are impacted by economic and political factors beyond your control.

There are two main types of market research – primary and secondary – and three main areas of market research – consumer, competitor, and environment.

Here’s a really helpful chart to use to organize information when you’re conducting your market research. This will help you conduct research that is comprehensive and cost effective.

three-main-areas-of-market-research-consumer-competitor-environment

Strategies for cost-effective secondary market research

Demographic Research (Customer)
Basic demographic research is something you won’t have to conduct yourself. Every city, town or region will have demographic information available online, or in city halls, libraries and business centers. National and regional statistical information is also available online or at government agencies.

Online and Consumer Research (Customer and Environment)
Primary market research can be expensive, so secondary research on general consumer behavior and purchase data can be extremely useful for small businesses. Some information will be available online, while other information (usually free) will be available at your local chamber of commerce and business centers.

Primary market research strategies you shouldn’t miss.

Ground Research (Customer or Competition)
Spend some time in your local area at different times of the day observing and talking to the people who live, work, or spend time there. What do you notice about the neighbourhood? How well is it taken care of? Why do people spend time here? Is anything missing? Get a sense of their age, gender, clothing and any other features.

Competing Businesses (Competition)
If you have direct competitors in the same local area, spend some time being “their” customer and making observations about their business. How do they advertise? What market are they targeting? Is there a niche market that is being missed?

Surveys (Customer or Competition)
Surveys are the most popular way to gather first hand information from your existing and potential customers. Take your time to administer them carefully and thoughtfully – surveys can get complex and variables can be high.

  • Keep your questionnaire short and focused on soliciting the information you need to answer your market research question. This will encourage a higher response rate.
  • Remember that your information will only be as good as the people you ask for it. Try to get as broad a cross section as possible. Depending on your market research question, you may not want to limit it to your existing customers.
  • Choose a survey method – telephone, web or paper-based – and understand the pros and cons of each. Research some survey templates, and spend more time than you think you need to on crafting your survey.
  • Include basic demographic questions on your survey so you can cross reference responses with factors like age, income, sex, and profession.

Website Analysis (Customer)
Use a website tracking system like Google Analytics to monitor how visitors to your website behave and use the information available. These programs will allow you to see how many people visit your site, where they are from, what pages they are looking at and how long they spend on your site.

Customer Loyalty and Purchase Data (Customer)
Your point of sale system – depending on the level of features it offers – may also be able to run reports on customer purchase patterns and trends. If you have a customer loyalty program, you can keep track of purchase information in each customer’s file or account. The type of information you’ll need to keep track of here is behavioristic: brand loyalty, product usage, purchase frequency, and readiness to buy.

Focus Groups (Customer)
Assemble groups of six to 12 people and ask them general and specific questions about their thoughts, opinions and habits as related to your marketing question. Be sure to assemble a cross section of people that is representative of your target market.

When you’ve completed your market research, analyze what you’ve learned. Go back to your original question, and weigh the outcome.

How has your market research supported the question(s) you set out to answer? Were your original assumptions confirmed or refuted?

  • Does my target market exist in my geographic area?
  • Does my target market actually want what I’m selling?
  • How does my target market want to purchase from me?
  • Is my target market interested in my new product or service?
  • How does my target market want me to communicate with them?
  • Is my target market large enough in my local area to support my business?
  • Are there areas of my research I could dig into for more information?

You may discover some hard facts to face about your business. Perhaps there is not a large enough market base in your area to support your business. Maybe you’ve spent thousands of dollars going after the wrong type of customers. This is all okay – it’s valuable information that you can work with to make better decisions about your marketing strategies and product or service offerings.

If you have flexibility in your product or service, you may be able to find ways to enhance your offerings and extend your target market to include more people, or a larger share of the marketplace.

Your market research is ongoing – each time you talk to a customer, supplier or sales rep, you’re gathering information about your clientele, and thus conducting market research. I often keep a log at the point of sale for staff to use to record customer comments and complaints. I also review the log for customer returns, and reasons for returns, to get valuable feedback on our offering.

Remember, audiences, trends, products and services change, so stay ahead of the curve and keep on top of your market.

Plan to make market research a regular part of your business, and schedule time and money for primary research at least once a year. This is the only way to stay ahead of the competition when it comes to trends and environmental changes beyond your control.

The next few Blog-a-Lessons are about applying the information you have learned about your target market to refine your marketing strategies. You’ve clearly identified who your target market is, and how those people think and behave, so your next task is to determine what to say and how to reach them.

In Blog-a-Lesson #8, we’re going to look at your marketing message and how clearly you’re communicating with your audience. The strength of your marketing message is the backbone of your marketing materials, and a huge factor in the success of lead generation strategies.

To Your Success,

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We help small businesses overcome fierce competition, modest budgets and solidifying their sales and marketing engine by improving lead generation, conversion rates, tranactions, higher prices and profits generation strategies.  

We help you develop breakthrough marketing strategies and put groundbreaking small business consulting ideas into action with our Silver Bullet System  – ultimately improving small businesses decisions and business results through proven methodologies.

 As John Maxwell certified coaches we have the management and team coaching expertise to tackle team challenges head on.  – wEquipu Team.