Step 5 : Compile a target list of prospective customers

Compile a target list of prospective customers in your target group.

Having identified which one or two customer groups you are going to target, you now have to find your new prospects. Direct mail is just one way of reaching target customers and is particularly effective when you can identify and reach customers individually.

Lists you buy are becoming more accurate as the quality of data improves. Even so, buying a list can be expensive and you may be limited in the number of times you can use the information. Think about the cost using the final 'cost per response' rather than the initial 'cost per contact'

You can now put your target customer list to use. You need to decide how to initiate contact with people on the list and what process to use to take them through to an order. You need to think about the message, medium and presentation.

The concept of grouping customers, or segmentation as it is called, lies at the heart of marketing. Although some of the terminology and concepts may feel a little foreign.

• Segmentation - the process of dividing customers up into groups, based on their product or service usage, buying behaviour, life style, location and so on.
• Customer profiling - a technique for developing a profile of a customer group.
• Segmentation techniques - techniques for grouping customers in both consumer markets and organisational, industrial or business markets.
• Targeting - a process for deciding which customer group or groups you are going to target in your business.
• Positioning - the process of determining the position in the customers' minds that you wish to adopt relative to their needs and expectations and to the offerings provided by your competitors.
• The decision making unit (DMU) - The various roles that are involved in most organisational buying decisions and some consumer buying decision.

A good way to learn about grouping your customers is to see how other companies in your markets or industry group their customers. You can find out by reading their sales literature, looking on their websites, watching what they do at exhibitions and even talking to them. Their approach may not be right for you but it may give you some good ideas.