Buyer personas are typically an exercise in understanding your business’ ideal customers, but with careful marketing, they can improve your results. Buyer personas include customers’ likes, dislikes, and personalities and work to help you understand who you’re selling to. This data is useful for customer service, but many businesses don’t leverage it to its full potential.
On its own, it does not affect Cost Per Click (CPC) or increase your Return on Investment (ROI) – but when used well, businesses can create client-specific budgets and finance their SEO in the upcoming year by understanding how to use buyer personas to their benefit.
Regardless of the ideal persona that you create from data, remember that the people buying your product or service are individuals. With that in mind, you can appreciate the small purchases that people make along the way – which build up. Along with market value, remember that every client has customer lifetime value (CLTV). Lifetime value encompasses all purchases made by a single customer over the person’s lifetime. Hence, you should target products, services, and financials toward longtime customers.
A customer who pays $10 for a paperback might not be helping your bookstore on the surface, for example, but that small purchase could represent a lifetime of small purchases – or large ones. If the customer continues to come back and buy paperbacks, e-books, and other products, you can use his or her buyer persona to cash in on CLTV.
To get the customers you want, keep cost per acquisition (CPA) in mind. Don’t depend on marketing or lifetime value to determine CPA. Many businesses lose money because they are overly focused on their ideal consumer and unwilling to spend the necessary money to broaden their market reach.
When counting costs, a good rule of thumb is to make a client’s CPA about 4–5 times smaller than their CLTV. Buyer personas should not take up more than 25% of your marketing. For your business to maintain success, persona funds should be much less. Devote most of your time and money to CPA so you get the clients you want most and the money that you need.
Although each buyer has a unique persona, that persona is part of a group. The dance mom or dad you sell ballet products to is part of a huge group of dance parents seeking the best accoutrements for their kids. Within that group, many buyers at a time will be up for grabs.
However, if there are not many buyers up for grabs, you may be dealing with buyer scarcity. Buyer scarcity occurs when a small cache of buyer personas pour money into your product but that money doesn’t cover what your business needs. Most business owners try to solve this problem with more marketing. Unfortunately, throwing more money at marketing doesn’t make customers appear.
Buyer scarcity is a signal to calculate your market size and share. The calculations tell you how many people you have in one persona group and which people are worth most of your attention. This keeps you from throwing money toward marketing projects that may not work. Focusing your best practices on one group will also pull in more personas.
Contact Zero Gravity Marketing to help you develop valuable buyer personas and make the most of your marketing budget.