How To Hit The Bullseye Every Time When Choosing A Market (1 of 2)

Welcome back to the Magnetic Marketing Podcast. Today we get to talk about how to hit the bullseye every time when choosing a market. Now, this is part 1 of 2, so this is going to be a 2-part episode, but that doesn't mean you can delay this. Go ahead and listen to it now. It's going to share a lot of insights and a lot of important things you're going to want to pay attention to. Now, once again, this is magnetic marketing. A lot of the strategies that we discuss are things that are pulled from the past and are put into today's world. As such, we're going to need to adapt and adjust. So as we start talking about lists, as we start talking about how do we segment those lists, look at how you do that today. How do you do that with the technology that's available today? How can AI help you do that even better? And let's take it one step at a time. Let's jump on with Dan Kennedy and Bill Glazer.

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Welcome to the Magnetic Marketing Podcast with your host, Dan Kennedy.

Hello everyone, this is Bill Glazer and welcome to another one of our monthly Diamond Telecoaching calls. And today's call I have with me of course Dan Kennedy, and on today's call it's going to be sort of an interview format where we're going to be talking about a topic which is how to hit a bullseye every time when choosing a market. So quite frankly, the short version of that is how to pick the right people to offer your products and services and resources to. And so we're going to be talking about choosing a market.

Dan, how are you? I'm good.

Great.

And actually, you know, we've got a pretty—

very, very prepared talk today that's going to be very helpful to folks. I also would advise people, this would be a really good month to have some— paper and pen ready because you will want to make quite a few notes this month. And you also want to go back and listen when you get the CDs of this call. You want to go back and listen to this a couple times. So, Dan, you ready to jump in?

Ready to go. All right, so let's just do like, uh, start off with a little bit of like clarification definition.

So what really does hitting the bullseye mean?

Well, most advertising and most marketing, as you know, is really mass advertising and marketing. It's done as much for brand awareness and market share movement as it is for anything else. And it tends to be, therefore, broadcast, meaning written, created, developed, presented in a way that appeals to as broad an audience, as many people, as is humanly possible. And when you think about hitting the bullseye, when you think about target marketing, you're actually doing quite the opposite. You're choosing a limited segment of a marketplace to aim at, and you are crafting everything that you do, both message and delivery, in order to hit them and just hit them. So one approach is great big giant haystack, there's a few needles in it, and we got to broadcast to the whole haystack. The other approach is to try and shrink the size of the haystack so that the ratio between haystack and needles is a lot smaller,— and then we can talk just to the needles.

So why don't we sort of get the elephant in the room out there. People are going to be thinking that, you know, this doesn't apply to my business as far as being able to really clearly define the market. Do you think it's possible to do that for any business?

Yeah, look, I think it's harder in some than in others.. There's no doubt about that, but I've not seen a business it's not possible in. Every business, if you can get into its records— sometimes the owner has the data and hasn't played with it, but every business has some customers, clients, or patients who are infinitely better however you define better, than others. Some that they would dearly love to clone and others that they just tolerate, and some that are much more valuable than others. Every business has it. I'm sure your men's stores did. I know every private practice does. I know every restaurant does and so forth. So because they exist, it means there's a way to target them. I think the main— the reasons that people don't do it are in some cases being penny-wise pound-foolish, as my grandmother used to say, and just refusing to invest on the front end in the targeting, but in reality, they're then investing on the back end in sifting and sorting and processing and dealing with low-value customers. Some of it's laziness because because this approach does require more work than broadcasting and mass advertising. And sometimes they fail because, you know, they mess it up. They got the wrong bait for the people that they're trying to attract. But I do believe it can be done in any business.

Yeah. And listen, from a Laser Kennedy perspective, Dan, one of the projects that you're involved with, that I'm heavily involved with, is exactly what you just said. Discussed, which is we took a look at our member list and we took a look at our non-member list, and we carefully had it very much analyzed by an outside service and figuring out of those who are the best types of folks to go after that mirror the people that are already the best members that we have. And so you're right. In most cases, there is— there are biases in there, and it's really smart to be able to do that because, as you pointed out, you used the haystack example, but we very much narrowly defined, let's go after the lowest-hanging fruit first, and in order to— that we would be of best value to and would be of greatest value to us. Let's do one more definition piece. Before we move on, which is let's define market. I think that would be very helpful to our Diamond members to hear that definition.

Well, I think you're right. People often ask to be, you know, what would be the best market for what it is that I do, and they're really not— have a good grip on even what a market is. I mean, certainly it is who. I mean, it is the profile of the person or people, the customers, the prospects, the clients, the patients, who it is that you want and who is available to you. Often there's a where in it, a place factor that may be geographic. It may be that they all belong to the same club or association. It may be that they're all members of some church, it may be that they're all on a list. Sometimes it has to include how they buy because just because somebody's part of a population that might be good for you as a customer doesn't mean that they buy in the way that you sell. Sometimes it even gets into motivation to why they buy. Again, just because somebody's part of a population it doesn't mean that they have the motivation necessary to buy what it is that you sell. I often talk about in our business that the overwhelming majority of small business owners, no disrespect meant, are really be-your-own-boss folks. They don't have a great deal of ambition. They really want to report to work in the morning. Pretty much as if they were their own employee, and they want to stand behind the counter and greet customers, hang out in the shop, hang out in the restaurant, and make enough money to pay its bills and their bills, and they don't have much ambition beyond that. They may be good customers for some people. They're not particularly good customers for us. So there's a who, there's a where, there's a how, and there's a why. Most people approach target market with geography very much in mind, particularly local businesses. You know, I've joked for years that the idea of target marketing to them is taking their coffee cup, turning it upside down on a map where their store or office is, drawing a circle around it, and bingo, there's their target market. When Disney first went to Florida, they really believed that thought the entire Walt Disney World business was going to be about driving distance vacationers. And really their motivation for going there was California was too far for everybody on the East Coast to drive. So they really thought they were creating a regional business when in fact obviously they now have a global business. You move from geography to geography plus demographics. In B2B, that's sort of name, rank, serial number. Sometimes that's enough, sometimes it isn't. In consumer, there's a whole lot more information available, and you can get to predictive stuff, psychographics, as well as demographics. If you want me to go through psychographics, I can. And then finally, there's the issue of response plus geography and demographics. You know, do we know that these people are responsive to advertising and marketing or not.

Actually, since you offered, I would like you to go through psychographics. So would you just talk— because for some people listening to that, they don't even know what you mean by it.

So, well, now we get into mindset, you know. So we have to deal with the right prospect group, and then, you know, can they buy, meaning do they have the financial ability to buy, are they the correct decision maker to buy, etc. Generally speaking, will they buy? So have they bought at our price? Have they bought in comparable categories? But really most importantly is do they have a strong reason to buy? Is their mindset right for what it is that we want to put in front of them? Because mindset drives behavior. And there's lots of ways to get at that. One is, of course, what they're already buying, because people interested in something tend to be interested in more of it, and interested in more of it from more than one source. So almost nobody, for example, very long subscribes to one financial or investment newsletter. If they subscribe to one, they subscribe to many. Another way to get at psychographics that is often used, and again, it's not easy, but it's very valuable, is timing. The old-time door-to-door Bible salesman's trick, which goes way back to when there were door-to-door Bible salesmen, but they scoured the obituaries and called on the homes where somebody had very recently died, and that helped the sale in general. In specific, they called on that home with the Bible pre-engraved with the name of the deceased on the front of it, which helped the sale even more. But the fact of the matter is, is that their surviving spouse, the family members, had religion more on their mind at that moment than perhaps they did at any other time. We know in cosmetic dentistry that there's a psychographic predictor of purchasing having to— for females particularly, having to do with the number of months since the divorce. And from a financial aspect, we also want them to have gotten the house. In weight loss and business opportunity, it's first calendar quarter of the year because over the holidays they've encountered the brother-in-law they don't like who has a better job than they do and just got a new car or bought a new vacation home, and they have New Year's resolutions and dissatisfaction of where they wound up at the end of the previous year all very much on their mind. In the hearing aid business, we discovered that the sweet spot was 6 months after the death of the spouse because they had a human hearing aid. They now realize that person is gone. For about the first 3 months, they're hermit-like. Then they begin to re-socialize. They have the need, and 5 or 6 months in, is when they're most mentally ready to hear that message. So there's lots of ways to get at psychographics, but most marketers really stop short of demographics or geography plus demographics and don't give enough thought to how can we know that this person is likely to respond to what it is that we're gonna put in front of them.

So actually moving on then on this topic now, and especially of adding psychographics, you know, one of the things that I've often heard you talk about, and you actually might have mentioned it already, is that behavior predicts behavior. So just, I want you to explain that— a little bit more depth, if you would, because I think it's very relevant to this topic of defining a market.

Well, it's sort of an analogy to things in motion tend to continue in motion. So if somebody is already buying in our category or exhibiting behavior that is linked to buying in our category, they're already in motion. And so years ago, auto dealers religiously believed that they couldn't be close to each other, that everybody wanted to locate a distance apart from the other one because they feared if they went to all the trouble to get you to their Ford lot to look at cars and the Dodge lot was right across the street, that they'd be a market maker for the Dodge lot., and they'd be losing customers to the Dodge guy. And so you rarely saw car dealers close to one another. Today, of course, almost every city has car dealer row, and all the car dealers like to locate next to each other. And in a sense, they're all market makers for each other, but they're all better off because they're pretty much all dealing with prospects who are already in motion. They're already looking at cars. Rather than having to be drug there to look at cars. So behavior predicts behavior. So for example, if you're soliciting funds for say an animal charity, which is better for you? Pet owners or donors to other animal charities or donors to any charity? I think the middle one is clearly best.. But a lot of nonprofits in that category mail pet owners, and they send direct mail to pet owner lists. But just because somebody owns a dog does not necessarily mean that they are, if you will, in motion to donate to a charity related to dogs. They may like their dog. It doesn't mean they like anybody else's dog. However, if somebody has donated to pet charities, They are already in motion, so if we can get to them, they are ideal. In reality, people who have donated to other kinds of charities are often better for the pet charity than our pet owners who we don't know whether they have ever donated to a pet charity or not, because the real motion we want here is donation. We want the charitable impulse, the person who will respond to a pitch about charity. And so you want to be looking at the behavior that predicts the kind of behavior you need. I'm sorry.

No, that's all right. So let's sort of start putting all this together, okay? So, and let's, well, let's look at it this way. Work with a client, and invariably whenever you work with a client, you're going to get around to market selection. It's going to be a key part of the conversation, same as when I work with anybody. So what are some of the key sort of criteria or maybe even benchmarks that you're looking at in order to determine even if market selection is appropriate or not?

Well, I've got a top 10 list, so first I think is always size, meaning is the size of the market sufficient for the goals of the person, of the business, in this scenario as you said of the client. So, you know, this conversation is always preceded by the conversation of— you know, what do you want your business life to look like? How much money do you want to make? What equity goals do you have? And so forth. So is the size appropriate to the goals? Is it really worthy of the investment of time, energy, effort, experimentation, and money to get to the point that you have a system that works for reaching that market or the segment of the market that you're going to go into? So size is always an issue. Reachability, is there a way to get to them that is somewhat efficient and that is affordable? So now we're really looking at who has already gathered them, who has already done some of the work, who has already put them together in one place. Is there an association? Is there a club? Is there a network of clubs? Is there a magazine or a newsletter that they read that is sort of theirs? Is there more than one, which is always desirable? Are there places on the web that they congregate, that they frequent, or some way they can be identified and then reached? So a real question is, we know who our potential buyer is, and we've kind of got that narrowed down, and if we've determined there's enough of them, then that's encouraging, but it's still not very useful if there's no good way to reach them. So if we have to broadcast before we can narrowcast, so let's say we want, former owners of men's clothing stores who have been retired from that business for 5 years or longer. And for some reason, that's our ideal prospect. And it turns out there's no magazine called that that they read. There's no breakouts in the lists of just them. There's no way to ID them. And we are now forced to broadcast, to run ads in the trade journal that they may still be reading, to run ads in the Wall Street Journal. To put up billboards, to go on television and say, hey, if you used to own a clothing store, we got something you're going to want to see, call us. That's somewhat unappealing. The reachability is at best difficult and problematic and may not be affordable. On the other hand, if we have something for model railroading buffs, we quickly determine there's 2 magazines they all subscribe to. There's clubs in almost every state. There's conferences they go to, national events they go to. There's competitions they compete in. There's retail hobby shops that just service them all across the country. Well, now we're starting to see a picture of more direct reach. So that's the second thing I would look at. Third is, is the market proven viable? Not necessarily that they're buying exactly what we sell and exactly the way we sell it, but they're buying something comparable to it in various ways. So that may be price. I mean, are they spending on something in the price range that we want to sell at? Or is everything they buy in life much less expensive, for example, than what we want to sell at? Are they— if we're selling something for the home, are they buying home furnishings? Are they buying home appliances? Are they buying some kind of something for the home? Or are they non-spenders on the home? Do they buy the way we want them to buy? So if we want to sell to them by getting salesmen in the home who make presentations, have they bought anything? That— will they let anybody in the house? Are they amenable to that? If we want to sell by party plan, do they now go and buy at home parties? If we want to sell by direct mail, if we want to sell by telemarketer, if we want to sell by webinar, you know, all sales methods are situationally effective. And so in some categories, webinars work great. In other categories, they don't work at all because people don't know what they are and they won't go to them. So is the market viable? Fourth, is there active interest demonstrated? So some years ago, for example, a client of mine spent a lot of money on an infomercial aimed at getting parents to buy essentially a home study product to make sure that their kids stayed off drugs. Ill-fated for a variety of reasons, but mainly because a lot of parents watch TV, but the vast majority of them are not concerned parents, and going back to the one above, reachability, there was no good way at the time to reach out to just the concerned parent, the parent who had demonstrated a high level of concern about raising a successful kid. And so that project had its problems. In weight loss, some years ago when you could get DMV records, everybody in the business got excited because now you could get lists of short, fat, dumpy people. But there's a big list between short, fat, dumpy people and short, fat, dumpy people who care. So I'm looking for active interest demonstrated. Fifth would be access to known buyers, which is really a subset of four. I mean, if we know, for example, again, hardly anybody subscribes to one investment newsletter. If they subscribe to one, they subscribe to many. So if there are lists of financial newsletter subscribers or expires, and that list owner will rent to a competitive publication, that's very interesting to me if I have that kind of a client, because now we can go right to known buyers. Are they responsive in a relevant way? So if we're going to— again, if we're going to use direct mail, do they buy from direct mail? If we want to use the internet, do they go to the internet? So not only are they responsive, but are they responsive in a relevant way to us? Seventh, are there unmet needs and desires that our promises are going to fulfill? In other words, do you have a really good reason to be there other than the fact that you want to be there and sell something? Is there space for you to have a persuasive USP? And by the way, a lot of people select markets without ever thinking about this. They move to an area they like and open up a ski shop regardless of how many ski shops are already there, whether or not anybody there skis, just because they want to live there and they've always wanted to own a ski shop. And they make the same mistake with direct marketing. So they really don't have a reason to be in the market they've chosen. They're pure duplication of what's already there. Therefore, they're going to find it very hard to achieve differentiation. Point 8 would be affinity, which is a really good reason to be there. Is there some— is there some great affinity with the market? I have a client I'm working with right now, for example, in the financial advisory business, and a second office is being opened. Of his practice in the city of Pittsburgh with a joint venture partner, Rocky Bleier, who's a 4-time Super Bowl champion player with the Pittsburgh Steelers. Well, that makes that market much more desirable, uh, for my client than it would be without Bleier, because we now have an affinity play, uh, price appropriateness. Again, is this market going to spend at the price or prices, fee or fees that we need to charge to achieve our goals that we want to charge? Are they appropriate to us for where we are willing to be with price? There's a, you know, sort of full-length discussion of all that in the No BS Price Strategy book. That just came out. And then 10th, is the market a source of ideal customers or clients? And this really gets into not just who can you make money from, but who do you want to make money from, because it's not just the money you make, it's how you make your money. And so I think personal preference, how you're going to feel about are you going to like your business after you successfully create it? Are these the kind of people you, you know, you really want to do business with? Because on a long-term basis, maybe the worst thing in the world is to be trapped in a financially rewarding business where you have great disdain or dislike for the customers, clients, or patients with whom you have to deal for those rewards. It's not necessary. There's a lot of markets. Excuse me. There's a lot of ways to make money. So there's no reason to put yourself in that place.

So that's my top 10 list. So, I mean, so if we did nothing else on this call other than you go through that top 10 list, it was like unbelievable value to folks.

Let me just mention that again real quick. In that case, I'm going to leave and take a pee break.

I'll be back in about 15. So real quick, so top 10 list for— For key criteria when you're looking for when choosing a market is the size of the market, the reachability and affordable reachability. 3 is proven viable. 4 is active interest demonstrated in it already. 5 is access to known buyers. 6 is responsive. Is it in a relevant way? 7 is unmet needs, desires. 8 is affinity which again is a really important option if it's available to you. 9 is price appropriateness, and number 10 is source of ideal customers. So I said it again because it's clearly worth everybody writing that list down and paying close attention to it because oftentimes it will make a big, big difference on figuring out how to choose the market when you apply as many of those 10 to it as possible. The only thing I think we should have done, Dan, differently is just maybe sort of like, you know, David Letterman style presentation, top 10 list, you know.

But yeah, well, you know, one of my C-list projects that I've been poking at for years, okay, is that entire book written by my evil twin of Unmagnetic Marketing. But basically, you know, everything that you should do to just screw things up and fail miserably. Actually, I really like that.

Yeah, I do too. And I actually think that it would really sell well because it's actually learning what not to do is in many cases as valuable or more valuable than learning what to do. So I think you should move it up to at least the B- list. You think? Yeah, I think. So I want to be mindful of the clock here. I might come back a little bit later on and ask you for a couple of examples of how you sort of You use that in different places, but I want to move to going now from market to targeting.

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