Who are the People in Your Neighbourhood?

Understand the relationship that you have with people who interact with your business.

Broadly, they fall into three categories:

The top group, which I call "friends", are your customers - that is, people who have paid you in the past for your products and services.

At the bottom are "strangers" - those who have never heard of you before. They may have found you through an advertisement, by a referral from somebody else, from the Internet, or by some other means.

The "neighbours" are those who have heard about you but are yet to become customers. They might be, for example, the people on your e-mail newsletter mailing list.

Market differently to each group

Of these three groups, which is the largest? Well it's most likely to be strangers, of course. And that's why many businesses spend all their efforts marketing to them.

However, the catch is that they are also the most difficult market to convert into customers. They don't know you, like you or trust you - yet. So it takes a much more concerted sales effort to convince them to buy from you.

On the other hand, the easiest to convince are your existing customers - your "friends". People who have bought from you in the past are much more likely to buy from you again. Even if it's the smallest of the three groups, it might be far more responsive.

To get the greatest leverage from your marketing efforts, make sure you know whether you're directing it at friends, neighbours or strangers.

You MUST market to each group differently.

For example, most direct mail experts start by writing to strangers, and are happy with a 3% response rate. The other 97% just ignore the marketing - and can even be turned off by it. But that's OK for "stranger marketing". However, that sort of marketing is less appropriate when marketing to "friends" - and you certainly can't afford to upset 97% of that group!

So how do you market to "friends"? Nice and easy! If you've built up a relationship, you really don't have to try hard at all. It might be enough to just tell them about new products and services, and they will jump at the chance to buy them. On the other hand, if you try this sort of "no frills" marketing to strangers, they won't buy at all.

If you get this wrong, your WILL fail.

I've seen many businesses make this mistake - especially on the Internet.

For example, most businesses try to get more "traffic" (that is, strangers) to their Web site, but the Web site doesn't do enough to "sell".

I've also seen some marketers who do sell to strangers fall flat on their face because they've tried to use the same marketing techniques to sell more to their customers (friends). Instead of sending a simple announcement about a new product, they write a long, hyped-up marketing letter that upsets their existing customers.

It's true that occasionally a stranger will buy from you despite your weak marketing, or a friend will buy again despite your heavy-handed sales letters. But that's the exception! You'll get far greater leverage by matching your marketing to the type of person.

So keep in mind whether you're dealing with friends, neighbours or strangers - and adapt your marketing accordingly.

Gihan Perera is the author of "The Seven Fatal Mistakes That Most Web Site Owners Make - And How To Avoid Them" and "Spin: Turn One Idea Into Hundreds of Information Products". Visit GihanPerera.com and get your complimentary copies now.

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