How to get started with Open Marketing
Step 3. Gathering strength - Part 3

Hello everyone. I am Hayashi, the representative of Monosus.

As an effort to get core customers together since the last time
Step 3: We talk about "gathering strength."

Last time

• Many companies use the funnel model,
  We capture customers through the following steps: awareness → potential customer → first purchase → repeat purchase → regular customer, and design measures for each step.
• This funnel model implements measures for customers at each step,
  It is based on the premise that you can develop customers step by step.
• On the other hand, companies can persuade customers by interacting with them through their products and services.
  The idea that you can change people's behavior and psychology to become regular customers is unrealistic.
• This is because customers simply select the products and services that fit their values and that they want to continue using through the purchasing and experience process.

I told him that.

This time, I would like to delve deeper into this idea and talk about how to actually formulate a marketing policy.

You're attracting too many leads.

First of all, I would like to tell you this
The problem is that most businesses are over-receiving leads .

The potential customers referred to here are those who can directly receive information from the company in some way.
These are customers who have not yet purchased your company's products or services.
Samples and trial products are not actual purchases, so they are considered potential customers.
In many companies, this may be thought of as a "organized list of people with whom you have been contacted at least once."

Based on the structure of the funnel, potential customers are like a population to encourage customers to move on to the next phase, so the more the better.

However, there is a big problem with this premise.

Only a very limited number of customers who are suitable for the core experience can
I have been telling you that they cannot become core customers,
When we actually simulate this numerically,
You will be able to see the big problems you are facing.

It depends a lot on what kind of products and services you offer.
The first thing you need to think about is what percentage of your target audience are likely to reach the core experience.

Prevalence is a numerical representation of the percentage of people in a population who meet a certain condition.
For example, there are 7.9 million men in their 30s in Japan, and of those, there are those who travel abroad more than twice a year.
Assuming that there are 200,000 people, the occurrence rate of domestic men in their 30s who travel abroad more than twice a year is
We think in terms of "2.5%".

Consider the likelihood of people becoming core customers for your product or service.

When conducting marketing, most companies probably have a rough idea of the gender and age group of the customers who will use their products or services.
In addition, if you are a business with a physical store, the trade area population will likely be set as well.
Within that population, what percentage of customers can we assume will reach the core experience?

In reality, the probability of reaching a core experience is a statistic that largely includes psychographic elements, so
It is nearly impossible to determine exactly what xx% is.

However, for example, in the case of hair care products, which we have previously introduced as examples ,
The characteristics of customers who are likely to reach the core experience are
"I have some concerns about my hair quality, such as frizz or wavy hair.
A woman who has tried various methods to improve her hair quality in the past.
I know that it is.
We then conduct further analysis to identify demographic and psychographic factors.

Demographic Factors

• The main target is women aged 35 to 54 (base population)
• I have a complex about my hair, I have clear symptoms, and I have tried some kind of measures.
  Or are you currently taking some kind of action?
• Have enough financial means to continue paying the annual fee of approximately 50,000 yen.
  The more time you spend on hair care, the higher your priority.
  

Psychographic elements

• They like high quality products, but are not too particular about being completely organic.
• Emphasis on practical benefits such as actual results rather than on particular preferences
• They tend to place more importance on skin care than makeup.
• Wear clothes that suit you, not just follow trends
• I have no qualms about buying things online
  

Possible factors include:
In reality, we extract a few more factors, but in most cases, we can derive the above conditions. Now, what is the probability of someone meeting all of these conditions?
In this case, even narrowing down by demographic factors alone would likely drop the occurrence rate to less than 2%.
Then, the results are further narrowed down based on psychographic factors.
In that case, the actual occurrence rate would be as low as 0.5%.

This means that if you randomly interview women between the ages of 35 and 54, you'd be lucky to find 1 in every 200 who is a potential core customer for your hair care product.

Given this premise, what is the point of the lists that many companies collect as potential customers?
In most cases, when gathering potential customers,
Companies rarely narrow their search.

In the example above, if the person is a woman between the ages of 35 and 54, they will almost unconditionally be added to your prospect list.
So what happens then?

You end up with a list of prospects who are unlikely to ever reach your core experience.

And so they do all sorts of things to get to that list that never actually gets to the core experience.
In addition, what makes the company's personnel's judgment dull is
Even if you don't get the core experience right, customers will still make a purchase or two.
So I thought, "Maybe these people will become my core customers."
I can't help but hope that this will happen.

But in reality, the probability that someone who doesn’t get the core experience will become a core customer is almost zero.
It would be better to keep this in mind when planning your policies.

When we break it down into actual numbers,
The selection criteria that companies use when creating prospect lists are often very rough, and the overall population is essentially the same as if they were selected randomly.

Even if we could correctly cut the number of unpromising customers in half,
Less than 1% of your prospect list contains potential core customers.

So 10 people on a 1,000 list, 100 people on a 10,000 list,
That means out of a list of 100,000, there are only 1,000 potential core customers.

In other words, if you have a list of 10,000 potential customers (I think most companies have lists of less than 10,000), how many of them are likely to become core customers?
There are only about 100 people.
In other words, measures aimed at the remaining 9,900 people are largely meaningless in terms of acquiring core customers.

The reason why many companies fail to achieve results in their marketing despite the effort and cost they put in is that they have fundamental issues in this area.

It's taken a long time, but I'm finally able to tell you all about the premise.
Next time, I would like to start putting together measures to gather strength.

Thank you for reading to the end this month as well.