How to Target New Business Markets

Scenario: "Dude, let's sell cheap items under our already-luxurious brand. We'll attack both markets and generate billions. Yay!" Pop-quiz-for-ya: Why does Toyota additionally sell under the Lexus and Scion brands?

• a) To show-off.
• b) To experiment.
• c) To target different customer segments.

If you answered (c): Ding! Ding! Mutha Ding! Ding! You're right.

1. The Toyota brand goes after the value-conscious car buyers.
2. The Lexus brand chases the luxury auto buyers.
3. And, the Scion goes after the youth crowd.

When you're trying to chase everybody under one brand (ala American car companies), you'll leave yourself with nobody. Instead, when you devote a brand to a laser-focus demographic, you capture their total devotion. That keeps them:

1. coming back
2. spreading word about your business

How to Lose Customers

The minute you're selling out to other demographics, your totally-devoted-gung-ho customers who-make-up-the-bulk-of-your-profits start running. The typical scenario for most opportunistic entrepreneurs:

1. Yo! Let's sell Mexican burritos!
2. Ching. Ching. Ching. We-be-makin'-the-money!
3. Oh-fo-shizzle. I-gots-a-idea to grow our business.
4. Let's sell hamburgers! Yay!
5. Uh-oh. Nobody's buying.

Sure, your rational mind would think: "If I sell American hamburgers at my Mexican burrito place, I'd get generate double the results." But, as you might know, business is anything but rational. Likely, you'll net less customers if you offer hamburgers. Why?

1. To people who loved your Mexican burritos:
   "These suckas have sold out. They're not devoting themselves to ME anymore."
2. To new prospects you think might like hamburgers:
   "How good can hamburgers actually be at a Mexican burrito restaurant? Eew. Next!"

Uh-oh. You're diluting your viciously strong brand with every distraction. If you want to keep your loyal customers + capture new customer segments, read on.

How to Keep Your Loyal Customers

The greatest event in mankind's history could happen across the world, and Sammy's number one priority still: His missing shoelace. The more your speak to "Me!" the more you capture "My" attention -- customers subconsciously think. People initially came to your brand because it "spoke to Me!" People started feeling emotionally connected to your brand because it constantly "focused on Me!" The smart to-do item then for a brand:

1. Don't sell out.
2. Consistently find more ways to cater to "Me!"
3. Trash those that don't focus on "Me!"

(Guess who will be the bulk of your brand's profits.)

How to Gain New Customer Segments

People relate Volkswagen with value and simplicity. Yet, when it sold the Phaeton at the pricey $75,000, prospects thought: "Oh-what-the-@^^%? Why would I purchase a $75,000 VW?" What resulted? Oh, about 1,000 sold. To people, Volkswagen didn't mean luxury. What should VW had done? Place it under a different brand so people could place different symbols on it. Some corporate examples:

1. Gap does it with Banana Republic, Old Navy, and Forth & Towne.
2. Yum Brands does it with Pizza Hut, Taco Bell, and Popeye's.

If you're targeting different customer segments, start devoting different brands to each.

"So how do I segment customers?"

Distinct characteristics define a customer segment. For instance, these may include:

1. age
2. income
3. gender
4. marital status
5. language
6. location
7. tastes
8. interests

Rule of thumb: the more you devote different brands to different combinations of those characteristics, the more you'll capture them them as loyal customers.

Different brands for different folks.

If you enjoyed How to Target New Business Markets, get a complimentary subscription to our freshest articles through email or through your feed reader.