Many companies know that not all customers equal, and yet, they market to all of their customers equally.
What I mean by not all customers are equal, is that not all customers’ business potential are equal. Some customers can bring you a few dollars worth of business while others can bring you hundreds of dollars of business. Marketing to these customers in the exact same way is not an effective plan.
So what is an effective marketing plan? The Marketing Pyramid, my friends.
What is the Marketing Pyramid?
Because all prospects are not equal, they should not all receive the same sized slice of your marketing pie. You need to spend the majority of your time and effort with the customers who are your best bets. Doing otherwise is just wasting your time and money.
The Marketing Pyramid is a tool that will help you decide how you should market to heavy, medium and light users through coupons, special offers, contests and other incentives. You build your pyramid from the ground up, spending more time and resources with the bottom tier, which is made up of your heavy, or primary prospects (A). The next tier is your medium, or secondary prospects (B). The top tier, and the smallest, in terms of time and resources spent, are your light, or tertiary prospects (C).
Determining your A, B and C Targets
You split your prospects into the three tiers based on their profit potential.
Your primaries (A) should make up 10% of your list. Your “A” prospects can include:
Current customers
Recent past customers (within the past six months)
Any hot leads from trade shows, Internet research, articles etc.
Recent referrals
Your secondaries (B) should make up 25% of your list. Your “B” prospects can include:
Somewhat recent customers – those who you’ve done business with between six months and a year ago
Somewhat recent referrals
Top targeted customers that you haven’t gotten a response from
Your tertiaries (C) should make up the rest of your list and should include:
- The rest of the targeted customers you haven’t gotten a response from
- Business cards, inquiries and other contacts
- Anybody else in your list that looks like they’d make a good potential client
Another way to categorize your targets into your pyramid is to estimate how many time you’ll close a deal with the type of prospect. A general rule to divide your list is:
A = 1 in 10 (or less) will close
B = 1 in 25 will close
C = 1 in 100 will close
Now that you know who’s in your pyramid, you can spend more time on the A’s, a little more time on the B’s and the least amount of time targeting the C’s. Generally, it’s recommended to contact the A’s 10 times per year; the B’s 4 times per year; and the C’s one time per year. If you mail out brochures or postcards, this is the number of times you should mail out your direct mail each year to balance your marketing costs with your marketing expenses.
Now you’ve got a prioritized list and you know just how much time and energy to expend on each group. Easy, right?
