Many business owners worry about low-cost competition undercutting their value to see targeting down-market customers as a way to have an edge. If your company is ready to expand into offering a new product or service that appeals to a new market, you must be careful to not diminish your brand value with current premium price point consumers. The short-term boost in sales is not worth the long-term risk to your overall brand.
Affordable offerings can be risky if you don’t take steps to protect your brand in the eyes of your current buyers & advocates. Today, I’ll share 6 ways to target a new audience and have a successful new offering.
Before expansion, it’s key to understand who your new target audience is and how they differ from your current customers. Each customer audience needs to feel that you not only provide a valuable product or service, you get them and are taking the time to build the type of relationship they expect from your business.
This leads me into the first tip: target a different type of customer. One of the biggest risks of launching a down-market brand is you unintentionally create a product that appeals to your current customer base. This could cause your core customers to spend less with you over time. Targeting a buyer persona you’re not currently working with protects your base. Once you know who this new customer is, then you can market to them in a different way than you do with your current buyers. Ask yourself: who is your ideal consumer, what do they want to see on your site, and then put that online.
That said, I recognize you can’t always expand your product offering to the point of completely talking to a new type of customer. In this case, you’ll want to make sure to distance your new product offering from your core brand. I recommend using a different brand entirely so customers will expect something different. Take the time to give your new product line its own identity with a different logo, color scheme, and website. Then if your base sees it, it feels different to them and some of their preconceptions may be eliminated.
This happened both when I helped launch Joss & Main at Wayfair and Balance at bistroMD. Both of these companies had buyers that were looking for the same products but wanted to buy them in a different way. For example, Balance focused on people who wanted healthy meals on hand for a busy day while bistroMD was a weekly continuity program for weight loss. They created a new more youthful visual branding strategy and used bolder, brighter colors than the more muted premium price point product.
Next, you should use different sales channels. Showing differently priced offerings next to each other often pushes customers toward the middle; grocery stores use this tactic very effectively. As I mentioned before an individualized website can help you better target your customer audiences and sell to each the way they like and expect to be sold to. If you don’t have the capability or time to create a whole new site, then create a landing page to show your down-market branding. Each offering should also have its own social media accounts to help keep everything separate and to make sure you’re speaking with customers effectively.
Even when you utilize a variety of channels, today’s buyers are savvy and they know what the market value is for your product or service. Most people will shop around and visit at least 3 stores prior to making a purchase. In this instance, it’s good to own your value tiers and promote why your main offering is worth the premium price point. It’s good to address it in your FAQs so people can find out what makes each tier different. You can also choose to create a grid (software companies do this quite often) that shows what support, options, and access people get at each level.
Okay, so you’ve figured out your new target audience and down-market sales channels, the next thing on the list is to use your advocates ASAP to help you promote your new offering.
Now I’m sure you’re wondering, how you do this when you’re just starting out? First, leverage your employees; they’re some of the best advocates you have. Coach sales and service teams on the value proposition for each of the product tiers well in advance of launch so they can consult clients during inbound sales calls or save a sale with a different offering.
Once the sales start coming in, then you’ll want to get positive reviews quickly and post them on your landing page or website and social media channels. You don’t want to rely on reviews from your other offering, you need reviews from the right segment of buyers. This feedback will help convince other customers that your down-market product is great so they are more likely to buy from you too.
Your down-market offering isn’t a defensive move (at least not in most cases) so you should reframe it in your mind to solving the unique needs of a different customer type. Using these strategies will help you reach down-market customers without hurting your core brand. By distinguishing your down-market brand, you can create a future for your business where you can create and deliver value for every type of customer. But, make sure to do the leg work so you don’t create unnecessary risk for your brand.