I just ran across an article that outlined the recent results of some studies that again show that more than 85% of our decision-making is EMOTIONAL and not rational. We’ve all known this to be true on a very basic level, but for whatever reason, we still cling to this notion that we need logical arguments to convince people of our point of view.

It’s no different when we are pulling together a sales and marketing strategy.  Even though we know that emotional triggers drive the decision, we continue to sometimes force our logic into the conversation.

Have you ever heard this phrase? “Most businesses sell things so that they can have customers.  We have customers so we can sell them things.” This is one of my favorite quotes (if you know who said it, let me know).  It speaks to the fact that selling more to existing customers is more profitable for your business, and for your customer because it reduces your marketing cost and their supplier complexity.

The best way to sell more to existing customers, is to build a relationship and a history with them.  And the best way to do THAT – is through direct marketing. Direct marketing doesn’t just mean Direct MAIL.  It can include personal visits, events, sales calls, social media as well as direct mail.

In this article I’m going to give you a task list that will get your customer audience started – so you can connect with them on an emotional level.

1. Get a list of existing customers.   This may seem obvious because “everyone has a customer list.”  This is a list I want you to start BY HAND.  Don’t just do a data dump.  Pull your team together and literally start listing people and companies that are top of mind for you. This should not be a HUGE list.  You might have 5 or 10 or maybe 50.  But not too many more than that.   This is the list of either great customers or crappy customers.  The great one’s you’ll want to create strategies for.  The crappy ones you’ll want to discuss and see if you want to make them great or refer them out.  Once you’re done with that, you can go to your database and pull down some more customers that might be in the “danger of losing” category.  And see what the deal is with that.  The question you’re asking here is – “Will building a connection with this person/company increase my sales and profitability?”
2. Segment and group these customers according to “benefit segments.”  These would be groupings that might include something like “Customers who like having stuff overnight, Customers who order in small quantities, Customers who use our product outside, etc….” Notice that these groupings are based more on how your customer experience and interact with your product or service and not just their demographics or location.  This kind of grouping or segmentation is KEY to increasing your profit margins and building great relationships and connections.
3. Develop a profile of these customer segments and the decision-makers in each one.  Think of this as literally developing a Facebook or LinkedIn profile for this personified customer.  Is it a man or a woman, what is their name, where do they live, what is their day like.  This is the best way to get into their world.  Start a list of what’s important to them in their personal and professional life.
4. For each group, make a connection between what’s important to them and what you actually provide that solves their problem or challenge.  Use index cards or sticky notes in two colors.  Use one color to list what’s important to these customers, then use the other color to list the offer that you provide that gives them that.

Whew – that was some work wasn’t it.  But it will be worth it when it comes to creating direct marketing campaigns that really connect.

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If you don’t do or “get” segmentation, your business is really missing out on dollars and opportunities.  Segmentation is the secret weapon of any effective marketing program.  In it’s simplest form, segmentation basically involves putting your customers into “like” groups; women or men, for example.   Ever wondered why we segment or how someone decided on segmenting?

Segmentation came out of the need to communicate more efficiently with customers.  One-to-one communication is the ideal, but as markets grew beyond the “village” that became inefficient and expensive.  So marketers moved to mass communication.  But then, the messages applied to some customers and not others.  Finally, marketers started grouping people into segments that reacted similarly to their message.  And today, as the world shrinks through the internet, segmentation is even more critical as we once again come around to one-to-one marketing.

Not every group is worthy of being its own segment.   There are some rules that have to be followed.

1. Mutually Exclusive.  Your segments cannot be overlapping and your customer shouldn’t be a member of two segments at the same time.
2. Substantial.  There have to be enough members of a segment so that you can take advantage of the economies of scale in communicating with them.  So, a segment of 3 low-volume customers wouldn’t justify a whole segment.  It has to be big enough either in terms of members or dollars.
3. Homogenous.  A workable market segment has members that are similar enough to react the same way to your marketing message or offer.  They need to value the same things, do similar things or interact with your product or service in a similar way for your segmentation strategy to work.

How to Start Segmenting

1. Take a Customer/Product Inventory.  The best place to start is to literally pull out a list of your customers and what they buy from you.  You can even use your customer files or a sales report by customer, by product and in descending profit margins.
2. Create a Demographic Profile. Now simply identify the visible characteristics of these customers. Gender, Age, City, State, Country, Products Purchased, Volume, Education level, etc. Basic demographic information is what you can see and document about the client.
3. Look for deeper segments. Most people stop at step #2.  but the ones who persevere to this step can really hit pay dirt.  Here are some other segmenting opportunities: Product usage – how do they use your product, in what applications?  This is a great segmentation tool for Business to Business marketers or for industrial markets.  Psychographic or Lifestyle segments; what are their attitudes about life, themselves and how they live?  There are some fabulous tools out there for PRIZM is a lifestyle database that groups people into zip code communities.  It’s an ideal resource if you’re selling to consumers or in retail.  Another resource is VALS 2 which separates people into 8 values and lifestyles groups.

You should be running at least two segmentation schemas at any time; the basic demographic profile (because you have to know who you’re selling to, what you’re selling and where it’s going.)  But don’t stop there, move on to these more sophisticated segmentation options because this is where the real profit opporunities are.

• High Usage Segments.  Do you have customers that purchase high volumes frequently?  You can put them on a “retainer” or contract that saves them time, effort and money and assures you of their constant order.
• On-Demand Segments.  Do you have customers that always order at the last minute and want it now — no matter what the cost?  Set up an overnigh or emergency on-demand offering at a much higher price.
• Hand Holders.  How about customers that requires a lot of service and hand holding?  They may be willing to pay more for your attention.

Those are just three easy examples of benefit segments that can and will increase the profitability and loyalty of your customers.  Not only that, but it will set you apart from other providers who haven’t caught on.

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