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By Justin Zohn

 

Market penetration is a traditional business metric.  There are two related concepts, however, that provide more actionable information: customer preference and relationship share.  Any successful marketer is always  

striving to satisfy the buyer’s unmet needs.  Those who satisfy buyer needs more efficiently than the next guy, gain competitive advantage.

Buyers not purchasing from your firm generally fall into two categories.  There are those who have requirements that your current products and services cannot satisfy – customer preference.  And then there are those who simply are unaware of your ability to satisfy their needs – relationship share. 

Customer Preference - Meeting the Buyers' Needs

Customer preference surveys enable marketers to ensure their value proposition meets the needs of the market.  Understanding how well your company’s value proposition is aligned with the market needs and making appropriate adjustments will certainly impact your success rate for turning prospects into customers. 

A simple yet effective market research survey will measure the buyer’s:

·         Most important purchase decision criteria: quality, service, price

·         Annual purchase volume

·         Brand awareness: top of mind, others brands named, have heard of brands

·         Brands shopped: brands known for quality, service, price

·         Brands bought: why/why not, have they switched brands

·         Recommended improvements in service and offerings

·         From whom the purchase was made, how they became aware, method of first contact

There are a variety of inexpensive survey instruments available for conducting customer preference research.  They include mail surveys, POS questionnaires, invoice inserts, store intercept interviews, and traditional telephone surveys.  A brief questionnaire requiring less than ten minutes of the respondent’s time should provide acceptable response rates and deliver meaningful information to help you best position your offering.

Relationship Share - Creating Buyer Awareness

Once you have validated your value proposition, relationship share should be the next consideration you make.  Relationship share is simply the number of prospects that are familiar with your company out of all potential buyers in your market.  Regardless of how well suited your offering is for the market, if your potential customers do not have knowledge of your product, you won’t have buyers.

The first step in building relationship share is understanding your market.  How many businesses are out there, where are they located, and what do they look like.  See Amy Hamman’s article Building Your Own Virtual Marketplace for a discussion of database marketing techniques aimed at identifying your market potential. 

After you’ve identified your market opportunity, you should ask yourself, “how can I most effectively create awareness with my potential buyers?”  There are three major components to successful awareness building:  the message, reach, and media.  Your message should reinforce the distinctive features and benefits from your customer preference survey. 

Reach refers to the question, “how do I target my message so that I maximize exposure?”  You can improve the effectiveness of your marketing campaigns by identifying groups of buyers with similar needs.  Sources include:  industry associations, trade magazine subscribers, national and local business journal readers, and chamber of commerce members. 

Finally, when developing your marketing program, your choice of media is an important factor in the success of delivering your message.  As you evaluate the format of your message you should be evaluating cost as a function of response rate.  B2B marketing requires a media that can convey an often-complex value proposition to specific audiences.  Trade magazine and business journal advertising, chamber of commerce and business club newsletters, direct mail, e-mail, and the Internet are all common B2B marketing tools.  Again when making your media decision you will want to choose the mode that provides the most exposure at an affordable cost. 

If you’re serious about increasing your market share, strive to become the preferred supplier to your target prospects and build relationships.  Plan to conduct annual or bi-annual benchmark research surveys.  As customers’ needs and your competitor’s offerings change it’s important that you remain a step ahead.  Maintain your market database of prospects and customers and use that database to effectively communicate with your potential buyers.

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