by Larry Heiman
Certified E-Myth Coach

We need to begin with an important distinction: Advertising--what E-Myth refers to as "Lead Generation"--is the "magnet" you use to attract the customers you want to your business. Marketing is the process you use to determine who and where those people are, what they buy from you, why they buy from you, and how they think. With that information at your command, then--and only then--can you begin to construct the strategic magnet that irresistibly attracts your ideal customers.

In our twenty five years of working with business owners, we have discovered that most don't have a clue about what draws customers into their business, and what exactly their "ideal customer" does once he or she gets there! Customers are either coming in or customers are not coming in. The vast majority of businesses operate with this shotgun approach to their market. An E-Myth business strives to convert that shotgun to a laser. So, before you begin to broadcast your message, you have to uncover the facts about who you're talking to. Marketing is the process of discovering the truth about your "Target Market"--those groups of customers or clients you would most like to clone.

Effective Marketing Research Seeks All the Answers
At the cash register in Charlie's Diner, there's a fishbowl. On the sign taped to that fishbowl is an invitation to drop your business card for a drawing for a free lunch. Ever wonder about that fishbowl? Did you leave your card? If so, you participated in the greenest of grassroots marketing research. You became a data point for Charlie's Central Demographic Model ("CDM"). Your business card provided Charlie with invaluable information. Charlie now knows how far you traveled to be his customer (his Trading Area), your gender, and, based on what your card says about your business and your title, a surprising amount of assumptive information about your view of the world and the kind of messages you might best respond to.

Talk about a free lunch!

But the fishbowl leaves some essential questions unanswered.

Your business card in the fishbowl provided Charlie with the Who and Where, and some of the How, but his critical missing component is the What. What did your visit to Charlie's Diner represent in terms of his "Product Mix?" Did you stop in for a cup of coffee? Did you order the pie? Did you pick up the tab for six associates for the full lunch special? In other words, how significant are you to the financial health of Charlie's Diner? Where do you fit in what we call the "Product/Market Grid?" For Charlie to really get a clear picture of your relative importance to his bottom line, he'd have to staple your order to your business card. Charlie would have to lay out all those stapled orders and business cards on a grid to determine what kind of customers he has, where they come from, and what they bought! Then he'd have to figure out the margins of each of those "products" and finally begin to get a fairly clear picture of who his "ideal customer" really is -- a combination of numbers that represents the group that is making the strongest contribution to his bottom line! Does this seem like a lot of trouble to go to just to figure out who pays his rent? Absolutely. How can Charlie hope to effectively grow and thrive without knowing the answers to these critical questions?

From Raw Data to Knowing What Motivates Your Customers to Buy
Estelle is a real estate agent. She has a variety of products available: new homes, old homes, condominiums, rental properties, land investments and developments. For Estelle, the Quantification of her Product/Market mix may be a little bit easier than for Charlie. She begins with what she knows. Her business is document-rich, and her file cabinet is the mother lode of raw Marketing data.

Who are her customers? The first-time homebuyer, age 27 to 32, double-income, one in a sales position, the other an entry-level accountant, with 1 child. The single female, age 26 to 35, in a middle management marketing position, shopping for a condominium. The married male, age 56 to 66, a senior partner in a civil law firm, children out of the house, looking for a home in which to retire. The developer, age 42-51, interested in investment property to build "spec" homes. From this historical data, Estelle can construct an extremely accurate picture of where her sales come from, where the greatest profits are, and which combinations truly represent her "target" and "secondary" markets. Estelle may be squandering her time showing income property and the same effort would be more profitable if she focused on her executive homes.

Now Estelle has identified her "Ideal Client." She has used her historical data to construct her CDM. She knows where these clients came from and where others with their common characteristics might be. Knowing who they are is the starting point. Knowing what they need is what Michael Gerber calls The Power Point. Estelle now begins to construct her Central Psychographic Model (CPM). She knows her market's family status, age, income, race, and employment status. By projections based on proven principles, she can begin to speculate how they think, their purchase preference profiles, and ultimately what they need to hear from her. She can begin to uncover the conscious and unconscious factors that motivate her ideal client to call her first. Then she can communicate to them through her carefully chosen "Sensory Package"--her words, the shape and color of her logo, her clothing, her facility, her car, her printed materials--everything with which her prospective clients come in contact. In this manner, Estelle can communicate the clearest possible message about how Estelle, the Real Estate Agent, is the only person with whom they want to do business!

Now Estelle can craft a finely tuned Marketing Strategy that focuses with laser precision on the market that is most likely to purchase what she most desires to sell. Now she's ready to Advertise!