In last month’s post “How to Grow Electric Vehicle Sales”, I discussed the importance of understanding your target customers so you can successfully market your new clean tech product or service. For instance, the people who bought the early Toyota Prius – typically middle aged, upper middle class, highly educated, environmentalists – were willing to prioritize environmental benefits at the expense of performance and cost more than others. How can you find out if you are reaching your target customers? Data.
As data analysis tools have become increasingly sophisticated, business leaders have been challenged to put to work the immense amount of data they have with which to understand their existing customers (online shipping, online surveys, even in-store shopping using rewards cards) and potential customers (website visitors, newsletter subscribers, social media followers). Let’s walk through the three keys to leveraging data to evaluate if your current marketing strategy is reaching your target customers.
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Step 1: Collect Accurate Data About Your Existing Customers
In a Wall Street Journal article a few weeks ago, Bob Davis discussed how inaccurate data is leading to bad policy making in China:
“China reported that GDP growth slowed substantially in 2011 to 9.2%, compared to 2010’s 10.4%. But maybe it slowed more – a lot more. ‘China’s economic statistics are usually inconsistent, occasionally wildly inconsistent, and do not seem to be improving in quality,’ said Derek Scissors of the Heritage Foundation. Bad data leads to bad policy. The faster the Chinese economy is seen to grow, the less incentive there is for Chinese leaders to try to shift their economic growth model to rely more on domestic consumption – a move that’s been urged by government officials around the world and a slew of economists. Things are so bad he calls for the U.S. Department of Commerce to compile its own estimates of Chinese Economic Indicators.”
How can you collect accurate data? There are an endless number of tools based on the needs and budget of your company. Here is a short list of tools I’d recommend based on my experience:
- Website: HubSpot, Google Analytics, VisiStat
- Email newsletter: Constant Contact, Vertical Response, Emma
- Social media: Radian6, Klout, HootSuite, Facebook Insights
- Online surveys: Survey Monkey, Constant Contact, CVent
- Location-based services: The Coupons App, FourSquare, Yelp, Facebook Places
- Customer management: CiviCRM, SalesForce
Step 2: Protect Your Customer’s Privacy
Today’s Economist illustrates how governments around the world are trying to protect citizen’s privacy:
“[There is a] global government crackdown on the commercial use of personal information. As data whizz across borders, creating workable rules for business out of varying national standards will be hard. Building a single European data-protection regime is hard enough. Harmonising it smoothly with America will be harder. Reaching deals with Indian bureaucrats and Chinese mandarins set to defend the interests and data of their countries’ rapidly growing online firms may be downright impossible. Welcome to the new world of data geopolitics.”
Every company needs to decide to what degree to protect their customer’s privacy, but here is “A Seven-Step Guide to Protecting Customer Privacy”:
- Conduct a data privacy audit
- Minimize data collection and retention
- Secure the data you keep
- Communicate with customers
- Give consumers a choice
- Provide a forum for complaints
Step 3: See If Your Existing Customers Are Your Target Customers
Assuming that you already know who your target customers are, you can now use the data you collected to see if your existing customers are your target customers. I argued in “How to Grow Electric Vehicle Sales” that advertising to everyone, but no one in particular, is doomed to fail. Chevy Volt product marketing manager Cristi Landy admitted as much: “We’ve learned that [the Volt marketing] is confusing to people.” Crystal Arvigio of Presidio Graduate School illustrates how the marketing of the all-electric Nissan Leaf differed from that of hte Volt:
“I was immediately struck by the fact that the Leaf is clearly going after the early adopter/leading user market and plays much more strongly [than the Volt] on potential customers’ sentiments about the environment to evoke a very strong sympathetic and emotional response. The Leaf has some functional drawbacks as compared to the Volt, such as not having gasoline as a substitute in between charges if needed. Nissan’s messaging appears to embrace the distinction with pride by suggestion the car is on the absolute cutting edge of the new electric vehicle technology.”
Needless to say, Leaf sales beat out Volt sales by 25% in 2011, despite the fact that the Leaf didn’t address range anxiety and was negatively impacted by production losses due to the Japanese tsunami. If there is a disparity between your existing customers and your target customers, sales will likely fall short and you have to redesign your marketing strategy.
How can you identify your target customers? Through a brand study. Branding guru Mitch Anthony discusses his process:
“[The study] is a highly collaborative program of discovery that surveys an organization’s history, its audience(s) and potential audience(s), its service(s), the features and benefits that these services provide and the competitive environment(s) in which the organization operates. Most important, the work provides many stakeholders with the opportunity to share and align vision, goals and “what-if” scenarios. Typically this direct survey work is supplemented by secondary research on the trends affecting the organization and on its industry or sector. The brand study articulates recommended positioning and messaging strategy in the context of the audiences served and the trends that might influence perception.”
Brand studies can be accomplished either by staff or outside consultants. The more important element is to have a deep understanding of brand management, a discipline to stick with the process, and resources to execute the strategy once you identify your target customers.
Closing Thought: Data Will Not Save The World
While I am a firm believe in the role of data in a successful marketing campaign, I also believe there are two critical pitfalls that clean tech entrepreneurs needs to be aware of.
First, people don’t always say what they want, because they often make decisions on impulse rather than intellect. Take the case of Walmart. After surveying customers and trying to out-innovate Target, the company spent hundreds of millions of dollars redesigning stores. What happened? “Sales went way down. Walmart has lost close to two billion dollars of sales, maybe more. Needless to say, the executives in charge of the project have been fired, and Walmart is spending yet more money to return to its original, time-tested strategy of offering a huge (albeit cluttered) inventory of low prices.”
Second, people don’t always know what they want. “Some people say, ‘Give the customers what they want.’ But that’s not my approach,” Steve Jobs once said. “Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, ‘If I’d asked customers what they wanted, they would have told me, ‘A faster horse!” People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.”Image credits: Magazine Ads, Economist, UC Berkeley, Auto in the News Original Article on The Green Light Distrikt