Top 6 Reasons to Use Buyer Personas to Increase Your Business Profitability
If you have ever dealt with a local shop or business and felt personally recognized, even before the hyper localised trends accelerated by the current market challenges, you may have felt happy at the recognition and sense of a more personalized customer experience.
At the other end of the technology spectrum from your friendly local bakery, like Thunders in Dublin remembering your favourite indulgent treat, technology brands like Amazon or the smaller more disruptive new entrants to the market seem to almost know what customers might like better than they do themselves.
From the simple personal level to the complex technical one, this is a version of segmenting consumers according to their tastes, tasks or needs, preferences, spending power and buying intention. The different segments are sometimes represented using what are known as buyer personas or purchaser personas.
Related: Branding Psychology in Adversity – 7 Ways You Can Embrace Behavioural Shifts to Grow Your Business
Given the massive change in the market over recent months there’s a high probability that a lot of your customer ‘purchaser personas’ have changed somewhat. Consequently they need a thorough re-evaluation so you can rebuild your business effectively and grow your sales. It’s because of those challenging issues we’re sharing and explaining what buyer personas are and how they can help you increase your leads, sales conversion and profitability.
Related: Increase Sales Using Buyer Personas, Your Guide to Understanding and Targeting Your Ideal Customers
1. Buyer Personas: A New Name for a Time-Tested Methodology
There is nothing new about the idea of segmenting customers into different types of personality based on factors such as their demography, buying intention or finance. For decades, it has been common practice amongst marketers. As well as buyer or user personae, they have been called purchaser personas, thumbnail profiles, user archetypes and consumer types, amongst other names.
Buyer personas and user personas have reemerged in recent years in tech circles. Technology provides a wealth of data about buyers and potential buyers, so it enables detailed personas to be constructed to a fine grain. Technology firms have used this to construct detailed buyer personae, informing their product development and brand strategy. But as before, buyer personae offer benefits to all sorts of businesses, large and small, product or service, B2B and B2C, not just technology ones.
Related: Branding; Creativity without Strategic Rigour is a Waste of Budget
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We found the flow of the course appropriate for the development of the brand through the various areas of the business. Already, we have developed our Customers Persona’s and our Brand Persona adding value to the business.
The course has helped us make more astute decisions in the business such as restructuring our product offerings so we grow more profitable lines and remove those with lower margins.
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2. Understanding Buyer Personas Help You Differentiate Your Offering
Buyer personas or purchaser personas enable a business to segment its target market more easily. Once you have done that, you can design product or service value propositions which deliver specifically against each persona. The detailing of the buyer’s needs and wants enables the propositions to match more than when they are generated abstractly.
Although propositions may vary for different personae, this does not mean that a lot of personalization is required. In some cases, the difference between the needs or desires of different personas can be small, but by tweaking the product lineup or communication, you can appeal better to both personae even with a single brand promise.
For example, it may be that the same product delivers for multiple buyer personae, but they are separated by different needs states. Simply by tailoring communication to the relevant needs states, the same product and a consistent core brand story can satisfy all of those buyer personae more than it would with a generic communication message.
An interesting case study is the rapid growth seen recently in vegan foods. Vegan foods were a niche product for decades but have suddenly started to take up significant supermarket space and deliver serious sales revenue. For years, supermarkets missed out on a big sales opportunity by using “vegan” as the primary buyer persona for non-meat foods. They then realized that as well as “vegan” there was another buyer persona for non-meat foods: “meat-reducing carnivore”. That has enabled them to increase vegan product sales dramatically. That approach is explained in this video
3. Buyer Personas Help You Segment And Focus Your Marketing Strategies
With finite resources and a sometimes infinite seeming list of things to do, it can sometimes seem that marketing is like trying to stretch a rope further than it can go. Figuring out who are your most valuable customers or potential customers and what you need to do to convert or retain them is critical because it enables you to make the most of the marketing resources you have. Historically this has been difficult – a famous retailer was quoted well over a century ago that he knew half of his advertising budget was wasted, but he did not know which half .
Digital analysis tools can help you analyse your market but without huge investment in complicated AI it’s often beyond the reach of most SMEs. The truth is data is great but it cannot make these key decisions for you. Buyer personae let you tailor the right messaging and form for different groups of target buyers so you can make sure that you deliver the right marketing messages to the right people in the right way at the right time.
The truth is, the critical questions you need to ask in relation to your data need to come from your business strategy which works in tandem with your brand strategy. It’s the ability to ask the right questions extrapolated from a lot of information that makes data useful and valuable in driving a business forward.
Buyer personae enable you to tailor the right messaging and form for different groups of target buyers so you can make sure that you deliver the right marketing messages to the right people in the right way at the right time.
Related: 4 Ways You Can Be More Customer-Centric to Grow Your Business
Buyer personas can help in other ways, too. For example, some businesses recruit consumers to test the effectiveness of marketing materials before using them. This can be as simple as calling together a small group or online panel of users and showing them drafts for feedback. In that situation, the different personas act as a readymade set of recruitment filters to find the right sorts of invitees.
A case study is the online supermarket Ocado’s use of recommendations for what to buy. Building an understanding of their customer types and using it to target certain pet owning buyers more effectively helped the online retailer increase its basket size, as explained in this video.
Related: Branding for Women, Why Women are Redefining Brands and Branding
4. Buyer Personas Enable the Right Marketing for the Right Channel
Marketing which works well for one type of customer may not have the same effect on another type. To maximize return on marketing spend, it is important to try to target buyers effectively with the right sort of proposition and communication. This is easier to do using buyer personae because they help you understand the drivers for purchase in different types of moments.
For example, a convenience-seeking persona may tolerate higher pricing but be turned off by detailed information, whereas a persona which emphasizes price over time may have more time to absorb product information, and be turned off at a lower price point than the convenience seeker. So the same brand of painkiller, for example, might offer a higher priced, smaller type of brand packaging in the convenience store channel and a lower priced pack with detailed guidance at point of sale in the pharmacy channel.
Related: Profitable Lessons from Luxury Brand Leaders, Brand Positioning for Premium Pricing
The whisky brand Laphraoig has a “Friends of Laphraoig” loyalty programme which segments serious whisky drinkers. Building more information about them over time through their online interactions directly with the brand, it can target them with limited edition products which may carry higher price points than the standard range. They are encouraged to visit the distillery with the promise of a free dram each year as “rent” for the plot of land there they are given, and the distillery has its own exclusive bottlings. The scheme is seen in this video.
This is a simple but effective implementation of buyer personae, which many small or medium businesses could easily replicate.
Are you a business leader, manager or entrepreneur who wants to re-evaluate or build your brand strategy so you can use buyer personae to increase your sales? Are you curious about how to build or scale a highly successful standout brand? Join one of our branding masterclasses because they empower you to build your brand, enhance customer experience, expand your market impact and create higher perceived value so you can command a premium.
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5. Different Buyer Personas Help You Explore More Profitable Pricepoints
Different types of buyers or different purchase situations can lead to different pricing, which can improve a business’s profitability or its overall revenue. Buyer personas help you understand the pricing elasticity of different customers, and sometimes even the same customers in different states of mind .
A simple example is a dentist practice. A patient who suffers chronic toothache during the weekend may be willing to spend a lot to remove their immediate pain. But a patient with rotting teeth who needs implants could struggle on for years without any urgent “pain point” to force purchase, so may be more price conscious. A single dental practice offering both services can help increase its pricing power by using customer personae to understand purchase drivers and obstacles. In the same way, some U.K. supermarkets hike prices at their convenience store branches .
Related: Use Psychology in Your Brand Strategy to Create Irresistible Brand Experiences and Increase Sales
In the digital context the same applies, with tiered price points often reflecting different engagement and usage levels different types of users are expected to have. Sage accounting software offers such an approach, as seen is this video.
Related: How to Build a Brand Like Amazon, Technology Branding and Marketing
“An exceptionally talented individual. Lorraine Carter, Persona Branding and Design has a wonderful ability to ‘horizon scan’ for any business and then bring them on a journey that delivers value to their Balance Sheet.”
Technology Ireland & ICT Skillnet
6. It’s Not Difficult to Generate Effective Buyer Personas to Grow Your Brand
Given how much help buyer personas can be to your branding strategy and marketing efforts, it is good news that generating them can actually be fairly simple, even for more leanly resourced SMEs. In fact, this is one of the key areas of focus in the Persona 7-Figure Business Building & Brand Strategy Mastermind.
People within the business already have a good idea of the rough characteristics of their existing customer base, as well as some target customers. These can easily form the basis of a first attempt at drafting buyer personas. They may be rough and ready but they will still have utility in shaping thinking.
From there, with some external help it should be fairly quick to identify a compelling, crafted set of buyer personas to test and build so they can be used to shape marketing efforts.
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Lorraine Carter is a branding expert and international speaker delivering talks that inspire and motivate along with masterclasses and workshops that inform and support transformational outcomes fast, and consultancy expertise that solves problems — using agile branding strategy underpinned by professional big-brand know-how — so you can outshine, outperform and leave your competitors way behind.
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For example, many businesses use buyer personas to help them offer different price points to different types of purchase situations, as seen in this video.
The market research agency GfK prepared a research report on UK online shopping behaviours, for a U.K. government department . They generated five types of online shopper, like “constrained struggler” and “traditional value seeker”. The detailed report is available free online and could easily form the basis of simple online buyer personas for many businesses with an online presence.
Related: Building a Brand with Big-Brand Know-How on a Shoestring and Doing More With Less
Identifying the different types of people who could buy your products or services is a straightforward and relatively simple process enabling you to make more of your branding strategy and marketing efforts.
It’s even more important to reevaluate your purchaser personas or buyer personas when there’s a lot of market disruption because the needs, tasks, intents and perferences of your customers may change so you need to adjust your brand strategy or perhaps even your business model to maintain relevance.
Buyer personas or purchaser personas enable you to target your messaging more effectively, with positive impact on both revenue and profitability. You already probably have a fairly good picture of what sorts of buyers are attracted to and buy your brand, product or service, B2B or B2C, so moving forward to generating actual buyer personae is a smart, very doable step for your business because they enable you to drive growth more effectively.
Questions to Consider
- How well do you differentiate between different buyer personae today?
- Could you improve the way you target different segments of your market with tailored marketing?
- Would sales in some channels improve if marketing was geared more towards the specific needs of buyers in those channels?
- How effective is your current pricing strategy when it comes to maximising profit?
- If you had to do a thumbnail sketch of your key purchaser personas or buyer personae today, what would you produce?
- Does you brand strategy or your purchaser personas need a brand audit health check so you can identify areas of strength, weakness and potential opportunities for innovation and growth?
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What makes you different from all the other service or product providers in the market because that’s what’s going to make your business be the No.1 choice in the range of those specific products or services that you’re providing. Also that’s what’s going to make your brand stand out and have a long lasting life and thrive in the context of where you’re operating and delivering value. So totally go for it!
This framework provides you with a lot of insight and more than that, with a systematic process that’s easy for you to understand, easy for you to grasp, easy for you to work with so you finally nail what makes you different in your business, and what you are about and what those key points are that resonate with your audience.”
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