Buyers are only part of the audience when a small business markets to everyone it can reach. Many of the others have little interest in the product, and reaching them costs time and money. Sending that effort toward the few groups most likely to buy changes the results.
On today’s episode of Strategic Edge, Jay Abraham, Executive Coach and Founder and CEO of the Abraham Group, explains how to separate high-value prospects from low-value ones. Abraham says blended averages hide the audiences that deliver the most profit. He also explains where owners can find the groups most likely to say yes.
Why some prospects are worth more than others
Prospects differ sharply in how much they buy, how fast they decide and how long they stay. Most businesses never measure that difference, Abraham said.
"They buy more things. They buy faster. They buy longer. They buy more profitably. Others don’t."
Abraham said naming the priority target for each product or service comes first. Next come the traits that identify those buyers. From there, an owner can test whether the current marketing channel is the best place to find them.
A broad category such as weight loss hides many separate motives, including a better romantic life or a promotion. Each motive opens a different route to buyers that competitors overlook, Abraham said.
Look where competitors do not
A debt consolidation company that buys leads on the usual platforms can find better prospects elsewhere, Abraham said. He advised looking at struggling real estate agents who work on pure commission and carry mounting debts. Buyers of quick-fix business opportunity courses were another group worth a look. He later checked the statistics and found a high probability of heavy debt in those groups, he said.
Correlations and anomalies in the data often point to audiences that no competitor is working, Abraham said. The next question is who already has access to those groups.
Strategic alliances give owners access to buyers that another business has spent years earning. A partner with a trusted relationship to a better audience can introduce a product to it. Abraham has promoted joint ventures, co-branding and recommended provider arrangements for decades.
Why averages hide your best leads
Blended averages hide which sources produce profit. Auto dealers often track a cost per lead of $40 or $140 across every source, Abraham said.
A source costing $180 per lead might convert three times as well. A source that costs $40 might waste the budget. Owners often refuse the $180 source to protect the average, he said.
“Aggregate means nothing to me. It’s illusory.”
Each source deserves its own numbers for conversion rate, profit and lifetime value. From there, Abraham profiles the buyer and checks whether the source and the message are the best fit.
Most owners default to the easiest prospect source. That habit wastes opportunity cost, money, time and effort on audiences unlikely to convert, according to Abraham.
Pay partners only when sales happen
Paying partners only when sales happen turns marketing from a fixed cost into a variable one, Abraham said. He used that model decades ago to lift a struggling gold brokerage to half a billion dollars a year.
The brokerage ran ads in The Wall Street Journal, Forbes, and newspaper business sections. Only a fraction of those readers cared about gold. Financial newsletters reached conservative, wealthy readers already interested in gold, silver, rare coins and real estate.
The company became the recommended provider for roughly 30 newsletters, and each newsletter received compensation tied to results. The company grew from a few hundred thousand dollars to $500 million within 15 months, Abraham said.
Many potential partners have never considered adding another company’s product to their offering. Abraham suggested paying them to send an email or a mailing. Another option is paying them to let a salesperson join their outreach.
Put your resources where buyers are hungry
Abraham said money, time, follow-up, and sales calls belong with the audiences that yield the most. That holds even when those audiences cost more to reach. Most owners instead spread those assets across marginal areas.
Owners should ask where the people poised to buy faster, bigger and more often are gathered.
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