Choosing the Right Market
Q: I recently started my own fire protection company. The market I'm trying to reach is the broad public. The average house in Denver costs around $250,000. I'm trying to get the average builder and buyer to install sprinklers. This will be an option in most new homes just like hardwood floors. I'm trying to sell peace of mind with my product. What's the key to tapping this market and convincing people that it's a worthwhile investment?
A: Too many entrepreneurs fall by the wayside because they fail to focus on their best prospects while wasting precious resources marketing to a wide range of target groups. Your best bet is to target the segment of the market most likely to buy your sprinkler systems. Later, when your company is a household name, you can address the "broad public" and make sprinkler installation the norm in most homes.
Peace of mind, as you describe it, is expensive-a luxury that affluent homebuyers can best afford. I suggest you focus your marketing efforts on reaching builders selling homes in the top price ranges and custom homebuilders working with high-income homeowners. Make the builders your primary target audience, and they'll put you in contact with the homeowners as warranted. Then arm yourself with the information you'll need to present your full range of product benefits.
Look to national industry associations and research on the Web to find statistics that will support your selling proposition. For example, find out what percentage of homes in the upper price ranges have sprinkler systems. And be prepared to present case histories or examples of how sprinkler systems in million-dollar homes or historic homes of note have saved valuable antiques or art collections.
Once you're confident you can make the case for your product and its use in upscale installations, create a list of high-end and custom homebuilders in your area and prepare a family of marketing tools you can use in meetings with them and their clients. An imprinted folder with color inserts and fact sheets is a handy tool you can customize depending on your prospects' needs. Since you'll be marketing to a sophisticated audience, be sure your materials are professionally produced and reflect the quality of your company's products and your professionalism. You may also want to employ high tech tools, such as a short video, that you can mail to key prospects and use in one-on-one presentations.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.