Segmenting Your Target Market: A Bottom Up Approach

In my last post, I discussed a top down approach to picking a target audience. In this post, I’ll discuss how to narrow your target by analyzing your past clients. This approach is for people that have been in business for awhile and have past clients to reference.

In this approach, you start with your current clients and identify characteristics and motivations that they share in common. From there, you build upwards to find subgroups.

Who Were Your Last 10 Clients?
A helpful exercise you can to get a sense for your current marketing process is to evaluate your last 10 clients. This exercise is designed to get you thinking about the buying process of real people. Too often, real estate agents approach marketing as a generality - “most clients want this or do that.” By focusing on real people with real problems and concerns, you can move past stereotypes and look at why these specific people hired you and how satisfied they were with your services. It’s helpful to pick at least 7 “good clients” - people you’d like to continue working with - and at least 2-3 “bad clients” - people you hope never to work with again.

For each client, answer the following questions:

• How did he/she find out about you?
• Why did he/she need your services?
• What was his/her role in making a decision to hire you? Who else was involved (ie spouse, family member, friends, coworkers, etc)?
• What were his/her major concerns about hiring you?
• How much education did he/she need before being able to make an informed decision to hire you?
• What kinds of questions did he/she ask you to explain?
• How long did it take from initial contact to signing an agreement?
• What was the best thing about working with this client?
• Would you want to work with this client again? Why/why not?
• Did any problems come up when you worked with him/her (ie not paying bills on time, not managing expectations, any arguments, etc) If so, what could you have done to avoid such problems?
• Would this client refer others to you? Why/why not?
• Has this client referred others to you?

Now, scan the list.

• What characteristics do they have in common?
• Where did the majority of them come from?
• Why did they buy from you initially?
• What did they appreciate about working with you?
• What did you appreciate about working with them?

As you look over your list of current and past clients, you should see patterns - some may have come from one particular referral source, others may share characteristics in common, while others may have had similar aspirations and motivations.

You want to categorize them into larger groups and make note of:

• their demographics
• their interests and lifestyle
• what their biggest motivation was for buying or selling
• how you can reach them through your marketing

If none of your past clients share any characteristics in common, you can do one of two things - either focus the exercise on your top three clients that were a pleasure to deal with or go back to my last post and use the top down approach to choosing a target audience.