Tuesday, March 30, 2010

Who Cares Whom You Sell To?


Your customers, prospects, and everyone else who studies your brand. That’s who.


When you are running a business, particularly an upstart brand, you are eager/keen/desperate to find customers. Most entrepreneurs feel that the colour of money is the same across all customers. From a cash flow, and quality of business perspective, that is true. But not if you view it through a brand lens. Who is seen using your product impacts its long term desirability.


Burberry, the much respected British luxury clothing brand, ran into trouble because it got associated first with British sports hooligans who targeted their shops for looting and then with the mob or chav culture in general. It got banned in certain pubs in UK because of this association. Eventually Burberry withdrew the baseball cap most favoured by these customers. Burberry has survived this “bad customer” onslaught and seems to be now rising again, but its desirability in its home market may still be suspect. ( http://www.marketingweek.co.uk/trends/chequered-times-for-burberry/2054638.article)


Ralph Lauren shirts and Arrow have become no-brainer executive uniforms. Their high price functions as an entry barrier. Junior executives and BYMBAs invest in these shirts as it is “safer” for interviews and at important points in the corporate ladder. On the other hand, Charagh Din - a well-known Indian shirt brand - has become associated with colourful party-wear shirts. They undoubtedly sell all kinds of shirts, but they are now defined by usage occasion and the average exec might consider them great for a date but risky for an interview. (http://marketingpractice.blogspot.com/2006/09/charagh-din-cd-rocks.html)


Your customers matter, particularly if you are relying on word of mouth and references, because they control diffusion. If you see someone you admire using something, chances are you want one too. The converse is true, too. You associate certain products, locations, outlets with a certain “type” of person and avoid them. Most people have an instinctive understanding of what consitutes a PLU (people-like-us) vs a PLT (people-like-them).


You might argue that diffusion is more relevant for a consumer brand, like say an Apple iPOD that relied on people aspiring to have that little white earpiece. But then enterprise sales relies heavily on references, right? If you were the seller of an HR product and were able to claim TCS, Wipro, IBM or Infosys - which have 100,000 employees - as your reference customer, chances are that the potential customer with 10,000 or 1000 employees would have no doubts about its robustness. Or if Pantaloons were the first customer for a retail product, it would be an easier sale to other retail chains.


In an ideal world - that is if you had sufficient funding to be patient - you would launch your product by deliberately targeting the ideal audience. If that isn’t possible, you should in public - ie your website, social media, speeches etc target the ideal audience, but below the radar sell to other customers. That is, your marketing would target a certain type of customer, though your salesforce might be less discerning. There is always the chance of scaring away some of those who don’t fit in with your ideal profile, but that is a risk you will have to take.


I do want to clarify that this is not the same as customer segmentation. This post is only about deciding whom you want to sell to based on what you think will enhance your brand image. It is a superset of customer segmentation.


Photo: Courtesy Ivan Walsh via Flick'r Creative Commons

12 comments:

Syamant said...

Very relevant point for entrepreneurs in business to business as well.

Choosing the kind of projects, clients and nature of work helps build a credible track record. It also helps to focus limited means on strengths and things that matter.

Jessie Paul said...

Syamant - agree. though the concentration of resources also happens through proper segmentation

Preetham V V said...

Jessie, you said "you should in public - ie your website, social media, speeches etc target the ideal audience". This advice positively changes the entire marketing perspective for me. I cannot agree more as a start-up that being conscious about the brand identity from get-go is of paramount importance. Especially in growth markets. Thank you for this prescription.

Common Man said...

Isn't there a chance that my 'Ideal audience' see my product being used by 'PLT' and disassociate themselves from me/my product?

wineye said...

Jessie, You are right about 'who' one should sell to, but if it comes to the survival of the company.. dont you think some kind cash flow is better than no cash flow at all !!

Plus, after all the thought on positioning, in the end isnt it the market which to a very great extent decides which way the brand/company moves.In a similar dilemma right now with my start up. looking fwd to ur response :)

wineye said...

Jessie, You are right about 'who' one should sell to, but if it comes to the survival of the company.. dont you think some kind cash flow is better than no cash flow at all !!

Plus, after all the thought on positioning, in the end isnt it the market which to a very great extent decides which way the brand/company moves.In a similar dilemma right now with my start up. looking fwd to ur response :)

Jessie paul said...

@common man - yes, your ideal audience will run away if they think PLTs are your main buyers. You need to manage that - either through perception management, segmentation or distinct sales channels

@wineye - like I said, cash is king so you may have to sell to non-ideal customers. but you do not need to publicize that. you need only a few good refs on your website or ads and those should be your ideal profiles

Samba said...

Well, I honestly believe its a luxury that would be good to have. Which vendor of retail software doesn't like Walmart or Carrefour or Tesco for a customer. But when they don't get them and only manage to get Dollar General, they should nonetheless welcome the opportunity, while still making the effort to bag that first order from Bentonville behemoth. Focusing on the right customer segment is essential. At the same time, its equally essential not to alienate other segments that we marketers think are not so crucial to our business. Eventually, it might be these not-so-crucial ones that end up saving the day for us. For instance, if you manage to get a couple of blue chip customers in a vertical and keep focusing on other blue chip verticals, you might easily miss out the mid market or worse, end up giving the mid market customers a feeling that your offerings are expensive Cadillac like things that make sense to big businesses only. It's important not to propagate this "expensive, not highly necessary" perception.

You talked about Charagh Din. What is the biggest flip side of the perception - "party shirts"? Only those consumers who have enough money and party often enough would spend on an half a wardrobe of CD shirts. The rest (even if they can afford CD), would be content owning 2 or 1 or even 0 of them. The same doesn't apply to Ralph Lauren. So I believe, as a marketer, while cultivating perceptions around my brand, I need to quantify the volume of use cases (in terms of the number of customers as well as their level of usage) around the perception.

Kamil Ali said...

Hi Jessie! My friend Dr. Mani from Triiibes recommended me to you. I would like to know more about No Money Marketing.

Great points this article. I believe that PR, word-of-mouth, online social marketing/media have more credibility. And new brands should be launched through these channels.

I love the point of yours on Focus:"your marketing would target a certain type of customer, though your salesforce might be less discerning."
Very true! Focus not only good for marketing, but also for your employees/management. E.g If you uses only one kind of airplane, your mechanics would be expert in maintaining/repairing airplane, that results in no accidents.

Jessie Paul said...

@Kamil - Glad you liked my post. there is more stuff on no money marketing at www.nomoneymarketing.org and I just joined triiibes thanks to Dr Mani

mark said...

I invite you to join us; become a member, and get involved with your HR colleagues. Your investment in membership will be well worth the knowledge you will gain and the professional network you will develop.

http://www.writeforhr.com

Tarak Desai said...

Nice post. What I think is brand matter much for established players in market. For a start-up or less known players, 'target segment' and customers 'value for money' matters. Well, but all start with "how you plan to build a strong brand "..Pls keep writing such a nice blog post..All the best.