It’s time to get focused about your marketing. The stakes are higher and your marketing needs to be very precise, especially when you are intent on customer acquisition. You need to know exactly who your customers are in your service area, and exactly which segments of your service area you should be focusing on. Not all prospects are created equal, and not all areas are of equal value to you. Read on to learn how to develop your Desirability Quotient (DQ) and employ market research to market smarter this spring.
Employing Market Research to Market Smarter
Market research is an oft-forgotten component to many HVAC contractors’ marketing and planning. Yet, those that have employed it will tell you just how insightful it can be, how helpful it is to maximize marketing efforts, and how costly it can be to simply guess about your marketing initiatives without basing your actions on “the data.”
Have you considered when the last time was that you took a close look at a map of your primary service area (PSA) and segmented your customer base to get a sense of things like your customer density and demographics? You might be thinking “I already know that,” but the truth is that I’ve yet to work with a contractor who doesn’t learn something new about his customers and his business model when he takes the time to look at things more closely. In fact, I’m working with a top HVAC contractor right now on a major growth initiative, which starts with understanding his current customer base and his market. Here’s what I’m suggesting to him and what I’d recommend to you as well.
Step 1 – Use a regional map to create a graphical display of where your customers are clustered. You should break this down by zip code. Assign zip code ranking by customer density. For example, a zip code with 300 or more customers is ranked as a 1, whereas less than 50 customers in a zip code could be ranked as a 5. This will give you a very clear, very visual sense of exactly where your customers are grouped.
Step 2 – Create a secondary map by using U.S. Census data, which is publicly available at no charge at www.census.gov, combined with your own knowledge of your market. The types of census data you might be interested in include median household income, age of home, single-family homes, fuel source type, etc., by zip code. Next, assign a ranking by color based on the desirability of each zip code. For example, a zip code with a high median income and an average housing stock age of 16-30 years might receive a color ranking of Red. Conversely, a zip code with a very low median income and a large volume of multi-family homes might receive a color ranking of Blue.
Step 3 – Take both maps and overlay the data. You will be able to see very clearly if there are major gaps between where your customers are, compared to where you would ideally want your customer base to be. You’ll start to gain a clear understanding of your customer base, and you can use this information to develop your Desirability Quotient (DQ). The DQ is the value given to certain geographic areas to rate how appealing they are, in order to focus your marketing efforts. Using this scenario where customer acquisition is your primary goal, a zip code with a DQ of Red-5 holds the most promise for success. That zip code has all of the indicators that are important to you, such as high median income, preferred age of home, preferred fuel source, etc. It also has a low density of existing customers, which means the opportunity for growth is high. Once you’ve identified zip codes with preferred DQs, you will be able to market strategically to build your customer base in those zip codes. Plus, you’ll be able to shift your marketing efforts away from areas that don’t suit your needs.