Strategic Relations Journal

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Brought to you by Justin Hitt, Strategic Relations Consultant. Thank you for reading.

Issue #55 -- October 21, 2002

A weekly journal about building stronger relationships in business.
Subscription information is available at the end of this newsletter. Thank you for reading.

Today you are in for a treat; ?Using ?Farm Clubs? To Build Your Customer Base without Increasing Your Marketing or Sales Costs? will show you how to reduce your costs while bringing qualified prospects closer to buying. If you are already using a ?farm club? strategy then you will testify on the value of such a program. Read it carefully and consider what you learned in last week's article for application.

I am still not sure what article I will bring to you next week. It seems I have a number of interesting projects in the works including two books and two audio programs. You have my promise that next weeks article will be interesting and very profitable for your company, stay tuned.

Thank you to those who took advantage of last weeks 50% off promotion. If there are any reports or product that would be of interest to your company, please let me know. I would be happy to provide articles for your company newsletter, or special case studies to address issues in your organization. Send your requests to feedback-strategic-relationsat


Justin Hitt
Strategic Relations Consultant, Author & Speaker

Using �Farm Clubs� To Build Your Customer Base Without Increasing Your Marketing or Sales Costs

By Justin Hitt, Strategic Relations Consultant,

A �farm club� is a group of highly qualified prospects who will purchase in the future, usually segmented by other specific demographics criteria to limit group size. The only reason these people are not customers is because of the timing is not right. It is like having an orchard, you take good care of each tree on a regular basis, always looking for the ripest fruit, and you limit your scope by a certain criteria so you get all the fruit before it falls off the tree.

The ?farm club? strategy is so powerful because it is scalable across business. Applied either to your supply chain or scaled down to be used by a single sale agent who wants a higher closure rate, this strategy can be tailored to your business with little effort. In fact, it is a valuable strategy real estate agents and talent scouts have been using for years. The value received by a business to business company using this strategy, is a greater understanding and control of your marketplace ? it becomes a bridge between partnerships, customers, industry, and your company?s internal functions.

Lead product -- a purchasable item that signals a further need for your product or service. A lead product is usually represented by a purchase that happens prior to that of your core offering, whether provided by you or your business partner.

You can serve "farm club" members at lower volumes since they are highly qualified, and those purchases are actually further qualifying them for your core products. The differentiating factor from prospects to �farm club� is the special small purchase of a lead product. Your low cost items should serve as an indicator of the need for your core products. These small purchases become predictors for when future purchases of your core products will happen.

Examples of lead purchases:

You do not need to create these lead products, but you need to know where to go for the names of who purchases them. If you partners sell along your product life cycle, arrange to cull out your ?farm club? from their customer lists. Most companies will allow this if you exchange like names to help them build their prospect lists.

In order for these low volume customers to gain membership to your �farm club,� they must also match all your established buying criteria except time to buy. Just because a prospect purchases a lead product does not mean they are likely to purchase one of your core products. Sometimes prospects pickup lead products out of curiosity since they are lower priced than your core products.

Since low volume customers will be expensive to serve, it is important to limit your �farm club� to those who are most likely to purchase very soon in the future. It is important to keep your �farm club� purposefully small so you can �harvest the ripe fruit before it falls from the tree.�

Now that you have identified these highly qualified prospects, it is important to stay first in mind, while developing your brand and direct value. Nothing is more discouraging then identifying someone who is waiting for the right time to buy, only to lose them to a competitor because of lack of action.

You can stay in front of your �farm club� while cultivating your relationship with them by:

  1. Sharing periodic newsletters,
  2. Involving them in market research,
  3. Providing educational materials,
  4. Keeping them informed with non interactive marketing,
  5. Offering promotional seminars/workshops,
  6. Inviting them to action with special offers, and
  7. Introducing them to partner sponsored co-marketing

The key is to stay in touch with this group at least once a month (instead of once a quarter, which is the minimum for contacting prospects) with something they will find of value.

A key determination of valuable materials to share with your �farm club� is any non-interactive marketing materials you would make available to your customers, but is too valuable to give to unqualified prospects. Place emphasis on non-interactive marketing because you really want to keep sales people focused on those most likely to purchase and existing customers.

You can create trust and a valuable relationship without working one-on-one with each club member. You really have to if you want to keep costs low. Remember these folks either have not purchased yet or purchase at an unprofitably low volume. Avoid spending up all of your profits before closing them on your core products or services.

The purpose of a �farm club� is to improve the closure rates of sales people and act as a bridge from marketing to sales. While you serve a specific niche of prospects or low volume customers who have the potential to become regular customers, you will also limit your �farm club� to those who will close in 1 or 2 sales cycles. Your farm club (as mentioned previously) is a special group of future customers.

You should have a number of objectives for your �farm club,� including cultivating them to become repeat customers for the long term. A �farm club� gives you the opportunity to set the buying criteria and a precedence of doing business with you. Provide these individuals such value and service that keeps them coming to you first for any product in your niche whether you offer it or not.

Another objective to have in mind for your �farm club� is that these prospects will convert to regular customers within a short period. Prune out club member who are not going to become a customer within 1 or 2 sales cycles, this keeps your lists small and manageable. This does not mean you do not continue to marketing them. Remember they are qualified to buy, just not now. Do not pay as much attention to them until they get closer to buying.

The Value of Portals in the �Farm Club� Strategy
A web portal can serve as a valuable resource to �farm club� members. You can provide relevant news, educational materials, web events, and other things of value that members can pull on demand. If you work with your industry partners then you can develop a portal that addresses the issues of your common customers -- together producing a lead generation source for each partner without ever posting a single advertisement.

Finally, you want to sell your �farm club� products that further qualify them for your core. This provides you capital for sustaining the relations and brings them closer to the target purchase. These items do not have to be your products, just products that further qualify them as buyers of the target product you provide.

The �farm club� strategy can be extremely powerful to building your customer base without spending any additional money from sales or marketing. The key is to market less qualified prospects less frequently while sales people only communicate directly with those qualified individuals ready to buy.

By reducing the amount of time that you spend with less qualified individuals the more time you have for those who will pay your bills. Existing customers are 6 to 10 times more profitable than non-customers are. Why spend the valuable time of your sales people with anyone else?

The �farm club� serves as the bridge where sales and marketing are working together to bring forward the most qualified prospects. This is the point where these groups learn how to improve their efforts in the work they do individually. This strategy helps your sales and marketing teams work more efficiently toward building your business.

If your company is not using �farm clubs,� you are leaving the field opportunities that will go to waste without your cultivation.

© Justin Hitt, All rights reserved.
/ strategic-relations | cultivate-topten /

Justin Hitt helps people build stronger business relationships through training, consulting, and other educational programs. He provides simple and easy to use materials for business to business organizations worldwide. For more information visit,

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