Every marketing system I’ve ever devised for any client—and they now number in the hundreds and hundreds, commanding fees exceeding $100,000.00, plus royalties—every one has been based on this Triangle. It is not, therefore, unique to this book. I teach it elsewhere, often, and rely on it as I do gravity and oxygen.
There are basically three components to marketing, for anything, anywhere, at any price, to anyone. Every individual loves to insist his business circumstances are somehow different. Not so. Every business, past or present, requires these three things to prosper: a Marketing Message, a Media to deliver it, and a Market to receive and respond to it. These three cannot be placed in any certain sequential order, because any one is no more important than the other, and none can function without the others. It is a closed triangle. Each feeds the others. If you will, “marketing energy” flows to and from each component, from each one to the other two.
There are a number of ways to render the Triangle powerless:
1. Right Message—Wrong Market—Right Media
2. Right Message—Right Market—Wrong Media
3. Right Message—Wrong Market—Wrong Media
4. Wrong Message—Right Market—Right Media
5. Wrong Message—Wrong Market—Right Media
6. Wrong Message—Right Market—Wrong Media
7. Wrong Message—Wrong Market—Wrong Media (the trifecta)
There’s only one way to get it right.
Right Message—Right Market—Right Media
Now let’s look at getting all three parts functioning effectively and in sync with the others.
How to Discriminate for Fun and Profit!
With a nod to Dr. Seuss, the WHO is very, very important.
When you choose and use Media, it’s vital to know WHO you are trying to reach, attract, interest, and persuade, and how they prefer to be offered and receive information and offers. When you craft your Message, you need to know WHO it is for (and WHO it isn’t). The WHO you want as a customer gets to govern everything.
If you reread that paragraph, you’ll think it all obvious. Yet most marketing remains product-centric, not customer-centric, and most marketing is very broad, vague, and generic, not narrow, focused, and specific. If you consider non-direct-response advertising, i.e., image or brand advertising, its emphasis is on the company and the brand, not about the customer.
Most small businesses attempt to influence the ocean with thimbles full of water. When you have comparatively limited resources, you must deploy them very selectively.
Sadly, most businesspeople cannot accurately and completely describe exactly WHO they want to respond, WHO is their ideal customer, WHO is their current customer, and for the most part, they are playing Blind Archery. A dangerous game.
I have dealt with many, many, many examples of this over the years. Let me tell you about three that are instructive and, in very, very different businesses, reveal the same very powerful, profitable, pretty much secret principle.
Scenario #1: A member of one of my coaching groups owned a very profitable, very unusual business: for a fee, his company helped frustrated U.S. men meet and marry brides from foreign countries and arrange for their immigration. His was a one-stop shop, providing access to thousands of women in Russia, Asia, and other lands eager to marry U.S. men, who had been pre-screened. The company facilitated communication, coaching, trips to the different countries, and assistance with legal matters. The basic fees were $495.00 to $995.00 when he joined my group, but they quickly leapt to $4,995.00 to $9,995.00 on my advice, with no change in client acceptance, although that’s not my point here. I questioned him about the WHO of his business. Who were the clients? Who were the best clients? He told me they were everybody: preachers, teachers, truck drivers, pro golfers, executives, barbers, butchers, and candlestick makers. But when I asked if there were more of one than the other, I hit the nerve; he didn’t know. So we investigated. And we found that about half of all the clients were twice-divorced long-haul truck drivers. Now I want you to think about what use we might make of that piece of information, and we’ll return to it a bit later.
Scenario #2: A client sold a homebased business opportunity aimed at “white collar” men and women. He advertised in USA Today, newspapers, and business-opportunity-type magazines, like this book’s publisher’s magazine, Entrepreneur. Again, I inquired about the WHO. His buyers included “all kinds of” sales professionals, accountants, lawyers, doctors, executives, and retired persons. But when I asked if there were more of one than the other, he wasn’t sure. We investigated. Over one-third were accountants and CPAs, about one-third mortgage brokers, and the remaining one-third a mixed bag. Now I want you to think about what use we might make of that piece of information, and we’ll return to it a bit later.
Scenario #3: I was doing a lot of work with a particular chiropractor, and we meticulously analyzed his records and surveyed his patients, to discover: the majority of his fee-for-service cash patients had two things in common: one, they paid using their American Express cards, rather than Visa or MasterCard, and two, they subscribed to Prevention magazine. The majority. Now I want you to think about what use we might make of that piece of information, and we’ll return to it a bit later.
How to Use Information
Go back to the first example, the foreign brides business. With the information uncovered, here’s what he could do: first, radically alter the places he advertised and the amounts of money allocated to different places. There are magazines for and read only by truck drivers, truck stops where literature can be distributed, mailing lists. So instead of spending 100% of the ad dollars in general media like USA Today, at least half could go where half the clients are coming from. In the Kennedy Marketing Triangle, I’ve just addressed Media. Second, he could take all his generic ads, sales letters, testimonial booklets, etc., and tweak them, creating a version talking only to and about truck drivers, featuring only testimonials from truck drivers. In the Triangle, that’s Message.
Consider the second example—obvious now, isn’t it? There are magazines for and read only by accountants and CPAs, mailing lists, associations, meetings, and conferences. Same kind of Media change, same kind of Message change.
Now, the third example. In the commercial mailing list marketplace, you can rent the list of Prevention magazine subscribers by zip code (as well as by gender, age, etc.), and you can rent the list of American Express cardholders by zip code. He took only the duplicates, the people in his market area on both lists. Because he had to rent 5,000 names from each list as a required minimum, it cost him about $700.00, and he only found 27 prime names in his area—a cost to find them of about $26.00 each. A lot of business owners would scream “Too much money!” Dumb, dumb, dumb. How much do you think it will cost running ordinary ads or mass mailing neighborhoods to find 27 who precisely and perfectly match your ideal customer profile? From sequential mailings to the 27, he got 11 into the office (40% response!—vs. 1% or 2% norm from mass mail); nine became patients, producing $27,800.00 in immediate revenue, plus long-term value, plus referrals. That’s the potential power of laser beam targeted marketing.
All three scenarios teach the same lessons. The WHO is very, very important. If you know WHO you want to attract, you can often find media or lists that reach only them. Often, the right description of WHO already exists in your business and you just haven’t paid any attention to it or thought about how to use it.
Well, what if you’re new in business and have no backlog of data about your WHO? Try common sense. Maybe check your trade association or even competitors for some clues to WHO. A client of mine starting a brand-new, high-end, gourmet food and wine store camped out in a competing store’s parking lot and a nearby top-price restaurant’s parking lot, stick counted make and model of cars, and found a profound bias for new and nearly new foreign luxury cars, so he rented lists of those car owners in his zip code. Or, at least, start out with your own preferences. WHO do you want as client or customer? One way or another, get out of the anybody ‘n’ everybody place at your earliest opportunity.
Personally, I long ago discovered that my best clients, best coaching group members, and highest value customers were politically conservative males from everywhere but the East Coast “blue states.” Are there exceptions? Yes, and in sizable numbers—I have and have had great women clients, a few flaming liberal clients, and very good clients from New York. But the majority, conservative males, mostly from the Midwest, South, and Southwest. Consequently, I make no attempt to be all-inclusive in what I write, say, or produce, nor do I give even a minute’s thought to who I might offend in the lower-value, lower-percentage groups. I know my prime Market, and I design my Messages and choose my Media accordingly.
At bare minimum, let this chapter make you think more about Markets. Too many businesspeople think about themselves, their products, their services, and what they want to say about all that, rather than thinking about WHO is likely to be hungriest, most eager, most receptive, is readily and affordably reachable, that they’ll enjoy doing business with.
Let me VERY clear: as long as you refuse to dig in and become sophisticated and smart about selection, discrimination, and target marketing so as to clone and attract ideal customers, clients, or patients, there are three bad things that will remain true for you: 1) you will be conforming to what the majority of average businesspeople do, therefore 2) you will be prohibited from rising above the average income the majority of businesspeople earn, therefore 3) you will be unprotected from and perennially vulnerable to commoditization, competition, income disruption by recession, or other adverse circumstances.
Resource Alert!
The book The Direct-Mail Solution by Craig Simpson, to which I contributed, takes you down the rabbit hole to the Wonderland of lists, the commercial list marketplace, and deeply into all aspects of successful direct mail. Craig is my “go-to guy” for lists and direct-mail project management, as he is for many of my top clients and groups of clients. He is often instrumental in doubling or tripling positive results. You can access Craig’s information at www.simpson-direct.com.
What I have described to you here in this introduction to list selection and target marketing is not simple, but it’s not impossibly complicated, either; it’s not easy, but it’s not impossibly hard, either. If a guy in the business of finding foreign brides, if a marketer of a business opportunity, if the owner of a local brick-and-mortar service business like a chiropractic practice can figure out how to identify and then directly aim at and attract their ideal customers, so can you.
You can move on to be even more sophisticated at this too. At the end of this chapter, you’ll get insight into that, in an exclusive discussion with me and Richard Seppala, one of the most sophisticated providers of data-mining expertise, consulting, and services in the country today. This is carried over from a prior edition, and since then, Richard’s companies have greatly expanded their range of services, including the use of Facebook and other social media for data mining and data-driven marketing. One of his newest enterprises, found at https://siphoncloud.com, protects advertisers from being victimized by fake and bot traffic, false data, and illusory results.
I know, you feel too busy just running your business as you do now to try and become expert in something as foreign to you as data mining and list selection. I know, you feel your business may be too small and your income may be too small for you to afford to invest in high-value lists. You must understand that this is exactly how average businesspeople forever anchored to, at best, average incomes feel. There’s no genius or real value in citing the 516 reasons you can’t.
This is important. You can make excuses or you can make an extraordinary income, but you can’t do both. Most business owners, including most of your competitors, choose the former, and that can be good news for you. But ever increasingly, Amazon and others of its breed are encroaching on local, not just national, businesses and invading category after category after category—and I assure you, excuse making is not favored at Amazon.
How to Speak Magnetically to Your Chosen Market
You put out Marketing Messages constantly—whether you’re fully conscious about it or not. People ask you, “What do you do?” and you answer them. You spend money advertising your business. You communicate with current customers. It’s important to understand five things about all this communication:
1. Your customers and prospects are buried in communication from your competitors and from countless others competing for their attention, if not their money. They are connected 24/7/365, but connection is not the same as engagement. In fact, consumers are, by necessity, practicing active disengagement. It is all a very dense fog to penetrate. Ordinary messaging won’t do it.
2. Most communication intended to interest customers fails miserably. Most net response from online or offline marketing is in fractions of a single percentage point. Marketers using my methods don’t just do incrementally better, but often 200%, 500%, 1,000%, 10,000% better. That is never accomplished easily or casually, nor by normal methods, and it shouldn’t be.
3. Communication about products and services, about what you want to sell, are generally a lot more interesting to you than to your customers and would-be customers.
4. People are most interested in what interests them.
5. People are most easily and quickly interested in information directly related to what interests them—especially information that promises fascinating secrets, solutions to problems, prevention for dire threats, promises of seductive benefits, or timely “breaking news.”
Item 5 is the breakthrough prescription for magnetic communication.
Getting Information-First Marketing Right
I coined the term Information-First Marketing to completely separate what I do from what everybody else does, and to completely separate the advertising, marketing, and promotion of information first for magnetic attraction from all other, ordinary advertising of businesses and companies, brands, products, and services. If you would like a copy of my in-depth Special Report on Information-First Marketing, you can request it direct from my office, (only) by faxing your full contact information and specifying this Report, to (602) 269-3113.
A good way to think about information you may create and offer is as bait. And a key principle is: MATCH BAIT TO CRITTER.
If you want a yard full of deer, do not put a 50-pound block of cheddar cheese outside. Put out a big salt block. If you want rats and mice, try the cheese. If you want to catch trout, do not tie an old shoe to your fishing line. Very simple formula.
Once you pick the critter you want to attract, as we just discussed (i.e., Market), you can then pick or create the right bait. In marketing, “bait” means two things: your Message and whatever “thing” you offer to spark direct response, whether that’s literature and information, a free service, or a gift of one kind or another.
Most businesspeople get poor results to their advertising and marketing because they either put out no bait, lousy bait, or the wrong bait for the critters they hope to attract.
No bait, that’s ordinary image or brand advertising, rather than direct-response advertising.
Lousy bait is boring, uninteresting, unappealing bait. A free report on How to Buy Insurance is lousy bait. A free report on How to Outfox the IRS and Legally Avoid All Estate Taxes might be better bait—for the right critter. That free report combined with a free audio CD with an interview with five wealthy executives about tax-planning mistakes they were making and how they fixed them, and another free report, How to Double Tax-Free Yield on IRA, SEP, Keogh & Other Retirement Funds, makes for better bait.
Wrong bait for wrong critters—the free report on estate taxes, if you want to attract young married couples.
Then, there’s a bigger issue this bait thing fits in. It’s called Message-to-Market Match (or mismatch). Most business marketing is generic, one size fits all. Most marketing is done with generic tools: one brochure, one catalog, one website for everybody. But one size never fits all. What’s magnetic is a Message just for me! As soon as I see it, I jump out of my skin because it is clearly for me, about me, matches me and my pain, fear, passion, hopes.
How to Deliver a Magnetic Message to Your Chosen Audience
The list of media choices is longer than all the pages of this book ripped apart and laid end to end. The online choices keep expanding at a rabbit-breeding pace. Some appear mighty but then quickly die or are murdered by younger replacements—like MySpace and Yahoo!. I don’t think there is any inevitability here. There is a huge hazard for time and money suck, should you decide you must be everywhere, use all of it, keep up with its demands, regardless of measured results. It’s funny to me, by the way, that nobody ever makes that decision about all offline media, but many succumb to it with online media.
There are newspapers, magazines, free-standing inserts, TV, radio, coupons, postcards, fliers, sales letters, catalogs, billboards, vehicle signs, bus-bench signs, sky-writing, package inserts, imprinted golf tees, websites, email, social media—Facebook, LinkedIn, Snap, Pinterest, etc., etc.—blogs, YouTube videos, faxes, telemarketing, and website addresses tattooed on boxers’ heads or strippers’ body parts, and thousands of variations and other choices. What’s good? What’s bad? What’s best? What’s worst? Is any of it essential?
No simple answer. Sorry.
First, it varies a lot by business. But more importantly, it has to do with WHO you are trying to reach. Do they pay attention to and respond to the media? A flier for two-for-one pizza stuffed under windshield wipers of cars at a swap meet may be a good media. A flier about investing at least $250,000.00 in international currency funds stuffed under the same windshield wipers, bad media. But it’s not the media. It’s the use of it. The one sure thing is this: if the media can’t be used to deliver a direct response message, skip it.
A warning: the media you or your staff prefer using, the ways you and they communicate and access information and entertainment, and your and their ideas about what nobody does anymore or what everybody does now do not mean squat. Only what your target customer audience actually prefers and engages with and obtains information they value from matters.
With that said, your mandate is to try to find ways to use as many different media as you possibly can. Most business owners become lazily dependent on only one, two, or three means of getting customers, leaving themselves vulnerable to sudden business disruption and entry of more aggressive competition.
Interview with Richard Seppala, The ROI Guy
Richard Seppala is a leading authority on data mining for direct marketing, what he refers to as cracking the DNA code of customer and prospect databases.
KENNEDY: Let’s begin with data mining. What is it?
SEPPALA: Finding the pink elephant who drives a ’57 Cadillac in Denmark. In other words, digging into a business’s customer data and information to identify common characteristics, then using that information to locate clones of those customers in others’ lists and in the marketplace in general.
KENNEDY: Give us an example.
SEPPALA: Back in the 2012 election, Mitt Romney broke political fundraising records—and I’m not talking about those crazy Super Pacs where billionaires contributed. I’m talking about his campaign’s success getting ordinary Americans to open up their pocketbooks. According to an Associated Press report, August 24, 2012, Romney used a secret weapon: data mining, or what I call “Database DNA.” The Romney campaign hired a very experienced firm to sift through donor and potential donor data—including what they bought, spent, even if and how often they went to church—to identify which were most likely to donate to Romney, and which were most affluent. This makes marketing more science than guesswork. Now, I’ve always been a numbers guy, even before I became “The ROI Guy.” At the very start of my career, at a huge corporation I won’t name here, I used tracking techniques and statistics to guide marketing decisions. Now my company teaches people how to use this science, and we provide data mining for better return on investment from marketing dollars, as a service to clients.
(D.K. Note: The use of data by candidates keeps getting more prevalent and more sophisticated.)
KENNEDY: Why do you use the term “DNA” for this?
SEPPALA: You are getting to the inner workings of a customer, so you know what behavior he is most likely to repeat, so you can isolate those most likely to buy from you. At the most sophisticated level, we utilize analysis by powerful computers of thousands of databases, including information about property tax records, charitable contributions, voter registration, families and children, credit accounts and purchases. Database DNA puts this information through a process that yields both demographic and psychographic or behavioral information. By analyzing Database DNA, the Romney campaign found donors in traditionally Democrat strongholds like San Francisco—and brought in over $350,000.00 from just this one area, during several months in 2012.
KENNEDY: This will instantly sound beyond the reach of most business owners. But I tell people that there are a lot of ways to clone customers. The more you know about yours, the better. You can access buyer and subscriber lists through SRDS.com, and find buyers nationally or in any geographic area that match up with yours in demographics; age, rank, serial number, but also in known interests and purchases, which indicate likelihood to again respond to offers in the same category. Business owners can also use data about their customers or best customers to make marketing content decisions—which photos should they use, what should we talk about. I was recently visiting with a client in finance who’d determined that nearly three-quarters of their customers owned yachts. This may lead them to lists—as you suggested, registration, license, tax information may be available. There are definitely magazine subscriber lists. But even in less targeted advertising or in marketing materials, that piece of information tells me to make sure there’s a photo of people enjoying themselves on their yacht. A story about this client’s voyage. So I’d say there are ways every business owner can make good use of data.
SEPPALA: I put data mining to work for my wife’s dental practice, so it definitely is available to small-business owners. I think it’s important to understand how much data’s available. Richard Leveille is a good example. For more than 20 years, he’s been doing the research to pick locations for Smoothie King franchises. He traveled town-to-town, built thick books with facts and figures about every local market—facts and figures compiled from maps, phone books, public records. Smoothie King has 600 locations and continues to expand, but Richard no longer has to spend days traveling and weeks researching, because the information he needs can be generated by data mining in about four minutes. Where does all the data come from? As I often hear you say, Dan, privacy in America is dead. It comes from every one of us. When we’re on Facebook, shop online, use a Rewards Card at a store, use our credit cards, buy from a catalog, we leave a record. Data collection is going on behind every social media site, every website, every store. People have been startled, after searching for a particular piece of information or item online, to see an advertisement for that product or a related product appear on their web pages soon after. That’s how fast and ingrained these systems are. It’s a bit creepy, but it’s the new reality.
KENNEDY: Can you share a data mining example that anybody could potentially benefit from?
SEPPALA: A grocery store chain tracking its Rewards Card data discovered that when men bought diapers on Thursdays and Fridays, they also bought beer. How did they use that odd piece of information? It meant the store should always keep diapers and beer at full retail prices on Thursdays and Fridays, because these guys were coming to buy these weekend essentials, and would buy them no matter what. It also suggested putting promotional displays of beer near the diapers on Thursdays and Fridays. Without the data, I don’t think anybody would think to look for a connection between diaper and beer sales. But this is exactly the kind of quirky connection that Database DNA will reveal.
KENNEDY: So, as a practical matter, business owners can start by considering what data and buying pattern and customer information they have available, and dig into it to look—manually—for any of these connections, then figure out how to use whatever they find. They can also begin collecting more data. If they have a business of some size, say several stores—not just one, they can get your firm’s help doing the analysis. Let me ask you this: what’s the biggest misconception about this?
SEPPALA: People are told that their customer list or database is their gold mine. But for many, that’s more bull than bullion. You certainly should be marketing aggressively into your own database. But that’s just the bedrock foundation. If you can segment your list based on factual information and data, you can match offers and presentations to them and market much more effectively. To go back to your example, that financial expert could enclose a photo of people enjoying their yacht only with a promotion sent to his clients and prospects who actually own yachts, send a golf photo to those who play golf, etc. You know, there would likely be a boost to response.
But the big opportunity, where we step in, is using data about a business’s customers to pinpoint and find more of those exact same customers. Finding new customers is the most expensive and difficult task most business owners face. Because the owner doesn’t know who to market to, they go after everybody in zip codes or grouped by very basic criteria, with no reason to believe most are well-suited to be customers. With that kind of saturation, you need to be present a lot, waste a lot, be very patient. With penetration, you can reach out to fewer prospects, you have a greater likelihood of not only getting more customers, but better customers. The questions are pretty simple, actually. What do the best customers of a business have in common? Were they mostly single or married, have kids or not, have high or low credit card usage? If we identify these traits, could we then find prospects to target who shared those traits? Would they prove to be “best customers,” too? My wife’s dental practice is a great case study. . . .
KENNEDY: I just want to make the point that most business owners never ask these kinds of questions. If pressed on this, most will just shrug and insist their customers are everybody, old, young, married, single, white collar, blue collar, etc.—and by being this lazy about collecting and either poring over data or getting data mining done for them, they stay stuck in time. I mean, their tenth year in business they’re still getting new customers the same way they were the first year. No smarter.
SEPPALA: Well, that’s right. I also find that what business owners think about their customers is very often wrong. In my wife’s case, I asked her to describe who she thought her best patients were and what they were like. She made what she thought was a good appraisal. Then I did the work. Not surprisingly, 80% of her income came from 20% of her patients. That led us to objectively analyzing the 20%. When I assembled the facts about these patients, my wife was shocked to find that her best patients were opposite of her ideas. We then took the composite profile of her best patients and cross-referenced it against potential patients in the area. As The ROI Guy, I had and have access to 61 million records with demographic information. We found THOUSANDS of people who were strikingly similar to the “best patient profile.” We divided these potential patients into three groups—Empty Nesters (older couples with kids grown and gone), Affluent Married Couples Without Children, and Affluent Families. This way, we could go to the three groups with three different direct-mail and email campaigns, something you mentioned earlier. By creating and using this Database DNA, we were targeting consumers who spend 120 times what average consumers spend in certain categories, and doing “waste management” by eliminating 90% of the geographic area, homeowner list most would mail. The results from this campaign were outstanding. A lot of “normal” direct mail for dental practices pulls from .05% to 1%, 2% top results. We got 7%.
KENNEDY: Richard, that’s exactly the way it’s supposed to be done! And I think it’s going to get more and more important to approach potential new customers this way.
SEPPALA: It’s certainly not getting easier or less costly to acquire customers. People are growing more and more resistant to material that doesn’t instantly personally interest them. The pink elephant who drives a ’57 Cadillac and lives in Sweden wants auto polish engineered to protect classic Cadillacs in Sweden winters—he doesn’t want just car polish. And if you know your best customer is that pink elephant with a ’57 Cadillac, we can find him. So, my company’s business is all about two things: our Database DNA analysis and profiling services, and our ROI Matrix tracking and marketing services, that help business owners and professional practice owners get precise and accurate measurement of ROI from different marketing campaigns and efforts.
KENNEDY: The bottom line of all this is that every business owner becoming a Direct Marketer needs to collect and mine customer data and information, and find ways to use the information he gets and biases and commonalities he uncovers—just as you’ve described.
Richard Seppala, known as “The ROI Guy,” helps companies maximize profits by accurately measuring return on investment. By identifying strengths and weaknesses, engaging in sophisticated data mining, and using proprietary tools like his “ROI MATRIX” and all-in-one automated systems that track real-time and accumulating value of each lead and customer, The ROI Guy delivers dramatic profit improvement. Richard is regularly sought out by the media, including NBC, ABC, CBS, and FOX affiliates as well as The Wall Street Journal and USA Today.
To learn more, and obtain free special reports, visit: www.YourROIGuy.com or call 1-800-647-1909.