A target market is described as the type of customers your business attracts, either by circumstance or design. When I talk with graphic communications service providers and ask, "Who are your customers? Who will buy your products and services?," I am often surprised that otherwise savvy business people either have no specific customers identified or their market is, "any print job that comes in the door."
Assumptions like this can lead to wrong decisions, wrong pricing, a wrong marketing strategy—and ultimately, business failure. Most graphic communications service providers understand that only a limited number of people will buy from them. The task, then, becomes determining, as closely as possible, exactly who those people are, and targeting your business technology investments, marketing efforts, and dollars toward them—your target market.
Successful graphic communications service providers have two different approaches to target marketing. They focus on either vertical or horizontal target markets.
Vertical marketing is a term used to define a company’s approach toward targeting that focuses on specific industries. For example, downtown Manhattan’s 291 Digital is a full service provider with more than 75,000 square feet of production space. It has the ability to handle imaging projects from conception through execution. By focusing on a specific client base—the high-end retail and advertising community—291 Digital has become recognized as an expert in its target market. The company has established a product and services portfolio uniquely designed to meet the needs of this client base, including digital retouching, digital photography, digital asset management, offset printing, digital print on demand and variable data, large format printing and mounting, lamination, and finishing.
One to One Gulfcoast thrives on the power of personalization for the non-profit market. Co-founded by friends Brian Weiner and Dana Place, the business was born in Venice, FL in October 2003. From a vision perspective, Brian and Dana wanted to offer innovative products that increased communications impact and response through the use of personalized text and graphics. They wanted to provide the tools to leverage customer knowledge to increase loyalty and retention while utilizing printed pieces that employ everything from simple personalization to 100 percent variable content.
In developing its business model, One to One Gulfcoast looked for potential customers that had good data. With that in mind, Weiner and Place decided that the primary focus would be the non-profit market. It was a market segment where targeted campaigns could be very effective. According to Weiner, "Some of the most data intensive organizations are non-profits. Non-profits tend to know a lot about their donors and donors tend to select non-profits for personal or philosophical reasons. You can reach these donors with a knowledge-driven campaign and improve both response rate and the level of donation."
Vertical markets are most often identified using the North American Industry Classification System (NAICS). If you wanted to rent a list to assess the size of a prospective target market or to conduct a direct-mail campaign, the list broker typically will create a list comprised of companies who have similar NAICS codes.
Horizontal marketing is when you single out a target audience that shares specific characteristics, yet can be found in all industries. The most common way that graphic communications service providers execute horizontal marketing activities is by job title. In this approach, you go after an audience found in many businesses, such as marketing manager, CMO, or VP of channel strategy.
Toronto-based Market Connections, Inc. has built its business model to address the horizontal needs of B2B clients. Market Connections was incorporated in 1992 by its two principals, Michael Moran and Daniel Brown. The company was created to provide a variety of graphic design, document management, print on demand, publishing, and production services to the direct marketing communities in the U.S. and Canada. Since its inception, the company has expanded and now enjoys a stable base of over 5,500 customers in diversified market sectors. Market Connections services customers who require laser and data printing as well as direct-mail production and has taken a very different approach.
According to Moran, "We focus on the delivery of high-value, industry-specific customized newsletters for the financial services, dentistry, and real estate markets." The company’s content is Web accessible to financial service agents, real estate brokers, and dentists as an educational tool for their client base. The agent can log onto the Internet, select appropriate content for his or her client base, upload names and addresses, and request a targeted newsletter. Moran states, "The value proposition to our customer base is that the newsletter is a persistency tool."
Elgin, IL-based Fabric Images focuses on the soft signage market. They offer the latest technology and progressive solutions in the area of fabric tension structures for tradeshows, events, retail environments, and museums. Marco Alvarez from Fabric Images has also experienced great success. He says, "Acceptance of the product is growing in the eyes of the consumer. Technology is starting to be a little more user friendly from a manufacturing standpoint. And fabric, because it is lightweight, allows the opportunity to more easily create dimensional pieces that are lighter than using rigid substrates. We do a lot of ribbons in mall settings—compound-bent light aluminum pieces covered with fabric. We are also doing a lot of larger pieces, including curved walls, kiosks, and canopies." Alvarez sees the market picking up after a couple of flat years—with his firm experiencing double digit growth over the past few years.
The benefits of effective target marketing are immense. When you talk to a defined group (market segment) about their concerns, it is much easier to get their attention. After all, you are talking about their challenges and their issues. Secondly, being seen as an expert in your field helps to differentiate your enterprise. The world of print is a crowded marketplace, so expertise is equated to differentiated value-add in the minds of customers and prospects. And lastly, once your marketing efforts become focused, your messages sound right to each market segment you are talking to. Prospective customers will view you as a partner that clearly understands them and their needs.
In addition, customers are frequently willing to pay a little more for a niche-oriented product. They also appreciate the unique benefits they experience with the more personalized customer support of the smaller company. Customers prefer purchasing from a company familiar with their industry or the specific needs of their job function. Professionals also tend to listen to their peers, and a recommendation or endorsement can help spread your organization’s popularity within a specific market or industry segment.
Most graphic communications firms know that 20 percent of buyers consume 80 percent of product volume. If you could identify that key 20 percent and find others like them, you could sell much more product with much less effort.
The heavy users of your products and services can be thought of as a market niche that you should attempt to dominate. Niche marketing today means targeting, communicating with, selling, and obtaining feedback on the heaviest users of your business’ products or services. The most profitable graphic communications service providers are spending equal amounts of time defining which customers they want to serve as well as those that they don’t. They are not trying to be all things to all people. They are becoming specialists.