Presumed Prospects, Identified Prospects, and Core Customers

Media Choices

Media Choices

Martha was THE media queen at a large, St. Louis based advertising agency in the late 70s. She personally placed several millions of dollars with local media.

The St. Louis radio stations, television stations, newspapers, outdoor companies all came to kneel before her throne and pay homage.

For, you see, the ad budgets she tossed to local media reps as if she was feeding scraps to her pets, could make, or break, a media rep’s sales goal.

And Larry couldn’t get in to see her.

He’d called. Left messages. Sent flowers on her birthday. Arranged madrigal singers to serenade her office during the end-of-year holidays. But, no matter what could not get Martha on the phone, or to pencil him into her appointment book.

Until October of 1972, when Larry had a 15 foot banner made that said: “C’mon, Martha. Give Larry an Appointment. Call 314-228-7xxx.” He hung the banner on the building across the street, so that each time Martha looked out her third floor office window, she saw it.

Martha is an Identified Prospect

When prospects are identified, we have their contact information available.  Instead of sending a letter to “occupant” and hoping someone reads it, we address that offer to a specific person.

Instead of running a 30 second TV ad to reach the whole viewership in hopes enough of those viewers might be interested, we pick up the phone, dial a particular prospect, and ask.

Presumed Prospect:

The prospect goes to her mailbox, and retrieves an envelope from Smiling Ralph’s Auto Emporium addressed to “Occupant,” or maybe “Resident.” The letter says, “Dear Neighbor, its time for Smilin’ Ralph’s Legendary Upgrade Your Ride sale, this Saturday at Smilin’ Ralph’s.”

Identified Prospect:

The prospect goes to her mailbox, and retrieves an envelope from Smilin’ Ralph’s Auto Emporium addressed to her. The letter says, “Dear (prospect’s name), your 2006 Chevy Silverado is worth $15,575 toward the purchase of a new Toyota Tundra 11 Crewmax at Smilin’ Ralph’s.”

The General Public is Too Vast

If Ralph sends letters to the general public, he’s sending them to people who don’t drive; to people who just bought a car; people who will not buy a pickup; people who will not buy any foreign-made vehicle, and people who simply can’t afford one.

The more non-buyers Ralph can remove from the Presumed Prospect list, the greater the percentage of sales which result from offers he presents to those remaining.  This has the effect of driving advertising down cost per sale. All of his advertising becomes more efficient.

So, instead of sending the Occupant letter to everyone in town, Ralph uses some combination of geography, demography, and psychography to eliminate as many non-qualified prospects as is practical.  Its Ralph’s goal to to spend no money to reach people who won’t buy.  Its his hope a significant number of the remaining Presumed Prospects will.

We prefer to know more about our prospects, than less.  We like efficiency.

Like Ralph, we look for similarities in age, income, event attendance, radio listening, magazine subscriptions, and other purchasing habits among our current Core Customers. We systematically eliminate groups of people from our Presumed Prospect listswho don’t match the profile.

Of course, the ultimate in knowing “more” is to have their names, addresses, and previous purchase information.  This moves them from the Presumed Prospect list to the Identified Prospect list.  Getting those people to self identify is the primary function of two-step advertising.

So, Identified Prospects Are Better?

Not better. More efficient.

C'Mon Martha Banner

C'Mon Martha Banner

Larry was willing to pay to hang a banner in Martha’s view because he knew she was a buyer. A big buyer. His risk of spending to reach a non-buyer is zero.

The cost of the banner may make it questionable as a good investment, but the sheer size of the anticipated payoff made this one worth the gamble.  Of course, banners aren’t the only medium.  And they are costly.

Compare the cost of Larry’s banner with the much smaller cost of a local radio ad.  Ah, but radio presents another problem.  To schedule that ad, Larry would have to know which stations Martha listens to, and the time she listens. He needs to know whether she is paying attention, or if she’s chosen that exact minute to return a phone call.

Odds are high Larry won’t pick the right time to schedule his ad.  He’ll hedge his bet by purchasing ads on more radio stations, over greater periods of time, and for several more days.  Maybe Martha will hear one of them.  And unless Martha picks up the phone and calls him, Larry won’t even know when she’s heard it and he can stop paying for additional ads.  Yeah, radio’s an expensive way to reach one single person.

OK.  Larry could rent a billboard and put his message on it. Oh, wait a minute. Which route does Martha take to work? Does she drive, or take the bus?  Will she be more likely to notice the message going to work or coming home.  Larry is right back in the unenviable position of needing to buy a lot of boards, too.

And television?  Larry doesn’t know which television programs she likes or which of those she’ll choose to watch at the time he’s scheduled the ad to run.  Even if he did, can Larry be sure she won’t choose that commercial break as the best time to raid the ‘fridge?  Come to think of it, doesn’t Martha sing in her church choir?  On which night do they rehearse?  Is that the night Larry chose to run his ad?

Newspaper?  Which paper?  Which section?  What size ad?  How many days?  Which days?  Looks like a significant budget for newspaper, should Larry choose it.

Mass Media is a Terribly Inefficient Way to Reach a Single Buyer

But, odds are Martha isn’t the only radio listener / television viewer / outdoor or newspaper reader. She’s likely one of many. How many depends on the station (or location, or circulation), and the time of day (or placement).

How many of those other people may be prospects? Ah. Good question. That sort of brings us back to the basics, and back to the concept of Presumed Prospects, doesn’t it?

As a general observation, the more we know about a shopper / potential buyer, the more it costs to expose that shopper to our message.

This concept is important.  I’m going to repeat it. It always costs more to reach a highly-qualified prospect than one who’s marginally qualified, or not qualified at all.1 But, the more qualified that prospect is, the more likely she is to buy.

So, like nearly everything in advertising, the way to determine the best advertising program for your business is to try a few and compare.  The cost of each ad isn’t really relevant.  Divide the number of dollars resulting from advertising driven sales by the total cost of the advertising.

The Exception

Cash Register Receipt

Cash Register Receipt

We know far more about existing customers than about any Presumed Prospects or Identified Prospects. Well, we should.

People who’ve already bought are most likely to do so again.  Since you already know each customer’s name, her address (or e-mail address) and what she bought, you can craft an individualized offer and deliver it for the price of a stamp.2 (You do know this information, don’t you)?

There’s a grocery two blocks from my home.  If 30 days goes by and they don’t record any purchases from me, coupons for the exact brands I prefer appear in my mailbox. They offer me 30 cents off six cans of Campbell’s® cream of chicken soup, and ring up a hundred dollars or so of other groceries on my next trip in.

And, our relationship is invisible to that grocery’s competitors. No one knows they sent the coupons but them, and me. And maybe my Postman, but he’s not telling.

Customer Data Screen

Customer Data Screen

Do you have a system to capture the pertinent customer information from each sale?  You need one.  You need to identify the characteristics of your Core Customers and apply those to the Presumed Prospect lists.

I promise, better database management leads to more predictable successes when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about creating a customer database?  Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call Chuck at 304-208-7654.


1. Martha and Larry are real people. I heard the story from Larry, years after he retired. After three days of her friends, colleagues, and other media reps calling to ask, “Well, are you going to give Larry the appointment?” she did. And, not surprisingly, she eventually placed a schedule.

2. When you send offers to your core customers, call it “Core Mail,” to distinguish it from Direct Mail.

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