Win customers from outside of your taget audience

There is a tendency for firms to aim for probably the most attractive groups of customers all the time - the wealthiest, or the youngest (on the assumption that they will have a longer life as customers), or those using the highest usage rates for the product. This really is fine, except that everybody else is targeting the same groups, so you can expect some fierce competition.

This was particularly the situation for the older consumers. Companies assumed that elderly individuals on pensions would have small money to invest and would most likely already have most of what they wanted. What these companies had not noticed is that many older individuals have generous occupational pensions, low fixed outgoings (having paid off their mortgages, and having relatively couple of loans) and also more leisure time to enjoy activities.

This is the marketplace Saga tapped into. Originally, Saga targeted the over-60s, offering vacations that catered for people who had been prepared to pay a little premium for additional care. Saga understood their customers' needs - while they ensured that much less mobile people got the help they required (for instance, older Saga customers rarely need to carry their very own baggage), they also recognized that most individuals in their sixties are fit, active, and interested in adventures.

Saga moved vacations for the elderly away from coach trips to Blackpool or the Lake District toward adventure breaks in the Amazon Rain Forest and activity weekends. The company also retains a greater degree of flexibility than other package businesses - recognizing that many Saga customers have kids or siblings living abroad. The company permits people to combine a tour of (say) Australia using the possibility of staying on for a couple of weeks afterward in order to go to relatives.

Focusing on a segment nobody else wants indicates having the opportunity to capture the entire segment with small or no competition - Saga are now in a position to offer numerous services other than vacations to this age group, having established their credibility in the market.

Encouraging individuals to shop in the exact same stores regularly has a lengthy history, going back to the trading stamps of the 1950s and 1960s. Trading stamps might be collected from retailers and saved in special booklets, which could in turn be swapped for goods. In Britain, the Green Shield Stamps scheme was at one time the biggest outlet for bathroom scales in the country, since bathroom scales required the lowest quantity of books of stamps.

In the digital age, loyalty cards have become ubiquitous. Nearly everybody who deals using the public provides some kind of scheme to encourage them to return and buy again - some schemes function very well, others simply seem to act as a giveaway. Making the scheme function well for the business can be a challenge, especially since most individuals carry several loyalty cards and can't really be stated to be loyal in any way.

Loyalty schemes, all too frequently, turn out to be a glorified sales promotion in which normal purchases develop up to a discount off the next purchase. A well-run scheme, though, presents a great numerous more possibilities. One of the earliest loyalty schemes in Britain was the Tesco Clubcard scheme. Holders of Clubcards hand the card to the cashier on each trip, and are credited with points that can be redeemed periodically against purchases.

Exactly where Clubcard goes a step further than most is that Tesco keep an exact record of each holder's purchases. This enables the business to develop up a virtual picture of what the individual buys, how frequently he or she buys, and how much each individual spends on an average shop. Tesco use this information to tailor their provides towards the individual: each customer is given a separate set of offers, easy to do with desktop publishing software.

At first, Tesco would identify products that the individual rarely or never purchased, and promote those: nevertheless, it quickly became clear that individuals were not redeeming those provides (presumably simply because these had been products they actually didn't want to buy), so Tesco shifted the emphasis toward special offers on products the individual does purchase, or on close substitutes. Response rates rose significantly, again demonstrating that meeting consumer needs will be the route to success in any business.

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Win customers from outside of your taget audience

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