Size vs Quality

I’ve talked about target markets before and how we end up structuring our business to serve each of our target markets better. One thing I have been seeing again and again (often by those who aren’t marketers) is the mistake of confusing size with quality.

Size

You must have seen the various advertisements out there that say ‘Get 6,000+ subscribers in a week’ or ‘Reach 100,0000 readers everyday’ or their like.  The main thrust of these advertisements / methods is that more is better – get a lot of subscribers / viewers / readers / etc. and you’ll do well.  Really.

Except that’s not always the case.  In fact, unless you are in a mass market business (e.g. shirts, pants, food) you can often find you’ve spent a lot of time or money (or both) and generated very little return.

Quality

Why’s that? It’s a matter of quality / target market.  Many of the above ‘quantity’ methods that are promoted focus on providing a large amount of subscribers / readers / fans / etc. – but few of them will actually buy from you.  There can be a number of reasons for why someone is not a valid ‘target’ like:

  • income level
  • age
  • location
  • personality (especially if you are running ‘free’ or ‘contest’ promotions constantly)
  • etc.

An Example

A great personal example of size not necessarily translating to purchases – our video reviews.  We have over 5,000+ subscribers at the time of writing to our video reviews on Youtube with over 1,000 views within the first week of a video being posted.  In comparison, we have only about 1,000 or so newsletter customers.  Yet in terms of conversions, our newsletter beat our videos by a vast percentage.

Now it’s not just the fact that the two are different mediums (customers read our newsletter for release dates, information about our site, etc. while the videos are more informative / educational in nature) but also the matter of targetting.  Newsletter subscribees are interested in purchasing from us – there’s no ‘fluff’ in the newsletter to attract non-customers; while the video reviews attract numerous non-customers from around the world.  In fact, the majority of our subscribers aren’t even Canadian (and with shipping rates being what they are, are automatically non-customers for the most part).

The Caveat

It’s not to say all these promotions / methods / tactics don’t work.  They obviously can and do for some businesses.  They can even provide a great initial boost to a site that is attempting to find a market.  And with the way Facebook and other social media systems work, that initial boost (the seeding) can be extremely important.  It’s just understanding the limitations and likely problems you will run into using these methods.

Marketing – Target Markets

What’s a target market? It’s a group (or groups) of customer(s) that a business has decided to aim it’s products and marketing to.  This group can be as small (left-handed, redheads who walk with a limp) to as large (women) as you desire, though generally it’s a good idea to focus your marketing on a reasonable target market.  Part of the process of creating a business plan involves defining your target markets, preferably with an idea about the market size.

Why are Target Markets Important?

No non-commodity business or product can be the one thing that is required by all customers.  Sure, if you sell salt, you might be the monopoly (or heck, oxygen) and not worry about your target market; but for the rest of us, we have to define these markets so that we can structure our businesses to suit them.

Are you a discount store? Well, then you have to sacrifice personalised customer service (to some extent), location and aesthetics.  Maybe even stock levels.  Are you a B&M in a shopping centre? Your product line is going to be very different and have a higher focus on the general public than the discount store.  And so on.

By defining your target markets, you can then adjust your store to meet their expectations – everything from pricing to product mix to location.  By meeting all their needs, you create goodwill and brand loyalty because you are ‘their store’.  To them, it seems you are perfect – while to those outside of your target market, you might be mediocre at best.  Mediocrity means that converting these untargetted customers, these poor fits take a lot more effort (and dollars) than those who are already targetted.  In an e-commerce site, you can see this is in low conversion rates.  In a physical store, it’s during the sales process when you realise that you are putting in a ton of effort and still getting very few sales.

Apple does this really well – to their die-hard loyalists, they are perfect.  Beautiful products, seamless integration, good customer service and a status symbol all rolled into one.  To others, they are over-priced, control freaks that have created a cult.

The Untargetted

The hardest part of having a target market, of understanding who we are focusing on also means letting go of the idea that everyone should be our customers.  There are individuals, even groups of individuals, who we just can’t / won’t focus on.  Doing so might be a detriment to other customers (example – by some reports, Yu-Gi-Oh players can be a horrendous group to have in-store); while others just have products or needs that we can’t meet (example – a RPGer looking for 40 year old product).

At the end of the day, letting customers go is difficult.  We see the loss revenue, the loss opportunity and want to win their custom.  Yet, meeting these untargetted markets need can be more costly than its viable.   It could be a matter of timing (bringing in a new product line) or it could be a decision, but we have to remember why we chose to target the markets we did in the first place.  Learning to let go is a hard lesson to learn and one that most of us have to relearn on a regular basis.

Letting Go

Once you let go of these untargetted customers, realising they just aren’t going to buy from you, you can (or should) realise that there’s often space enough for your competitors.  If some customers won’t buy from you, perhaps they are better suited to your competitors? Perhaps you should point them in that direction..  It’ll keep them happy and leave you focused.