MARKETING STRATEGIES
December 1997

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Scouting & Segmenting

by Susan Bilenker, Susan Bilenker Communications

If the 90s have taught us one thing, it's that we can’t afford to become complacent about the loyalty of clients or the types of services we offer them.

So even if your business is comfortably ensconced in a particular niche or two, as owner and fearless leader you must regularly scout new markets and new clients. Only thus can you build in the diversity and flexibility your company will need when a favorite client or market type departs.

However, in the age of lean-and-mean, it's not cost-effective to simply identify a market, rent a contact list, and start mailing out brochures. You need to test the waters first, to see how deep with potential they run. Otherwise, no matter how graceful and athletic your marketing high dive, you could discover a pile of rocks just beneath the surface of the glistening pool below.

According to Michael Gerber, author of the E-Myth: Why Most Small Businesses Don't Work and What to Do About It (Harper Business), "Poor market segmentation or strategy" is one of the "top ten reasons for small business failure." (quoted in Home Office Computing, May 1994).

What is market segmentation? It's a way of dividing all your potential and existing clients into subgroups of individuals who share similar needs and preferences.

For example, one of my clients designs concert pavilions. These are large, tent-like structures that cover an orchestra or band and sometimes the audience. In developing a marketing strategy, we could have mailed information to all people who organize concerts.

But we thought a little harder and realized that the needs and interests of rock promoters were markedly different from those of symphony orchestras. So we segmented the concert pavilion market into two submarkets, rock promoters and symphony orchestra CEOs.

Our contacts in each market receive different information, written and designed to respond to their particular needs and cultural style.

To gauge the effectiveness of marketing to each of these groups, from time to time we ask for feedback from the people on our contact lists, either by phone or brief written survey.

 

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last update: 4/16/99