The only sure way to significantly grow revenue is to increase customer demand. And sometimes this demand can come from the most unexpected places. In the 80’s if you asked a person to pay money for bottled water, they would probably have replied “are you crazy?” Then a combination of marketing, health and environmental factors conspired and now bottled water is hot. Some clever companies used market research to understand how to increase customer demand and the rest is history. Sales of Pepsi are down; Nestle Water is up.
How To Increase Customer Demand for Furniture
A furniture client recently came to us for advice about how to grow his business. He makes designer furniture that sells to high end restaurants, hotels and many of the rich and famous. He’s been doing this for 20 years very successfully, being featured by GQ, Playboy, Architectural Digest and the New York Times. Clearly he knows his stuff – and in a narrow circle his furniture is adored. But the circle is too narrow. Like the water companies, he needed to increase customer demand for his products. How could he do it?
The Secrets of Marketing
In his awesome book, The 1-Page Marketing Plan, Allan Dib gives away the over arching idea that will solve Tim’s problem. He writes, “By far the biggest leverage point in any business is marketing. If you get 10% better at marketing, this can have an exponential or multiplying effect on your bottom line.” We told Tim that he should use market research to understand potential customers for his products. And that once he had that information, he could translate it into effective marketing. Tim is in a better position than the soda companies. He already has a product that customers like. He just needs to tell more of them about it.
Step 1: Knowing The Ideal Customer Enables You to Increase Customer Demand
You cannot significantly increase customer demand without knowing your ideal target customer. With a representative national survey, our company was able to pinpoint these customers for Tim. They have very particular needs. Tim’s table sells at a hefty price tag. Not appropriate for IKEA shoppers, but perfect for discriminating customers who want a cutting edge design. Tim currently sells only a small number of these per month but they are good money makers. Once we understood the characteristics of Tim’s ideal customers, we were able to ascertain that it is a pretty big group. Certainly enough for him to experience big growth. If we could reach them, we were certain that we could help Tim to increase customer demand for his products.
In fact, customers were eager to buy the table and wanted to learn how they could do that. Why weren’t they already buying the table? Because they didn’t even know about it. Classic problem. Our research showed Tim where he could highlight the table, online web sites where nearly a third of the customers/designers went to get ideas about furniture. A good starting point. Now what?
Step 2: Speaking To Your Customers With Marketing
The magical formula presented by Allan Dib is learning how to speak with your customers. This is where things seem to get complicated. Now that Tim knows his customer and knows how to find them, he needs to develop a message to talk with them.
We were also able to help Tim here, by developing the customer Persona. It tells us the way that his ideal customers think, the ideas they like, the messages that work best with them. And perhaps most importantly, emotional triggers to their purchasing. As the old saying goes, “People buy based on emotions and rationalize the decision later.” A customer who is buying this table definitely is falling in love with it.
Step 3: Should You Use Advertising to Increase Customer Demand?
At this point, Tim wonders if he should approach an advertising agency to help him with the marketing. Perhaps, but first he needs to consider his advertising budget and what he is trying to achieve. There are zillions of agencies out there hungry for clients. The big ones are looking for clients who can spend hundreds of thousands on marketing. Many agencies could help him to achieve his goals especially in these digital days. In his great book, Ogilvy on Advertising, the master writes: “I do not regard advertising as entertainment or an art form, but as a medium of information. When I write an advertisement, I don’t want you to tell me that you find it creative. I want you to find it so interesting that you buy the product.” Well said David!
A good agency knows that it must hustle to sell for Tim. Not create confusing, esoteric or even worse, dull ads that won’t sell anything (and just earn them a fee).
There is a lot more to say from here. Tim knows the customer, he knows how to reach them, he works with a good agency to create advertising that is carried efficiently through smart marketing channels. And instead of selling a small number of these tables per month, this year he expects to sell a lot of them. His sales will sky rocket.
Needless to say, Tim is happy. He continues to make great products and is able to share them with more customers. And as a consequence, he is making more money. I once heard that Great Marketing kills bad products faster than anything else. In his case, Great Marketing is making his company a huge success! By increasing customer demand for his products, his sales are going through the roof.