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Marketing Advisory: Madoff Knew His Target Market
Marketing Advisory
The Marketing Doctor says:
The Marketing Doctor says:
Learning From A Ponzi Scheme –
Madoff Knew His Target Market
Folks, a short post (and some shameless promotion) on the big financial Ponzi scheme from a marketing perspective.
In my ongoing mission to show how marketing is central to life and business and not a smoke-and-mirrors sideshow, the Bernard L. Madoff story is instructive because even apparent criminality reveals the value of knowing your Target Market.
Ah, the Target Market, that cherished group of individuals who will purchase your goods and services because you have identified a need and a way to express that need to them. Now for the plug: When I am doing my Strategy Room gig (normally 1-2 pm on Mondays, Wednesdays, Thursdays), I am constantly thinking about my Target Market and just how to deliver my marketing take to them. (The emails from viewers help because that’s feedback —data I can use to help shape my message for my Target Market.)
Back to Madoff.
One of the reasons Madoff seemed to have prospered for so long and continued to gain well-heeled clients for his fund was because he knew not to promise sophisticated people unsophisticated (read “extravagant”) returns. In other words, he knew people would walk away if he promised them the sun and moon, but 10 to 15% seemed about right. He was also reportedly very selective —not everyone could become a client— and that kind of exclusivity, if exerted by a credible party (like Madoff seemed to be), can have real power.
Madoff seems to have used this knowledge for a genuine bad end —although I’m still wondering where the 50 billion went… no one can spend that much money on themselves no matter how lavish their lifestyle (think about it, a fifty story skyscraper in midtown Manhattan costs about a billion)— but the thinking about the Target Market was absolutely correct. Look at Buffett, whose approach wasn’t too disimilar in terms of limiting clients and having strict rules, except in Buffett’s case the returns were real.
And remember, it’s always easier when you keep marketing and branding in mind.
Folks, a short post (and some shameless promotion) on the big financial Ponzi scheme from a marketing perspective.
In my ongoing mission to show how marketing is central to life and business and not a smoke-and-mirrors sideshow, the Bernard L. Madoff story is instructive because even apparent criminality reveals the value of knowing your Target Market.
Ah, the Target Market, that cherished group of individuals who will purchase your goods and services because you have identified a need and a way to express that need to them. Now for the plug: When I am doing my Strategy Room gig (normally 1-2 pm on Mondays, Wednesdays, Thursdays), I am constantly thinking about my Target Market and just how to deliver my marketing take to them. (The emails from viewers help because that’s feedback —data I can use to help shape my message for my Target Market.)
Back to Madoff.
One of the reasons Madoff seemed to have prospered for so long and continued to gain well-heeled clients for his fund was because he knew not to promise sophisticated people unsophisticated (read “extravagant”) returns. In other words, he knew people would walk away if he promised them the sun and moon, but 10 to 15% seemed about right. He was also reportedly very selective —not everyone could become a client— and that kind of exclusivity, if exerted by a credible party (like Madoff seemed to be), can have real power.
Madoff seems to have used this knowledge for a genuine bad end —although I’m still wondering where the 50 billion went… no one can spend that much money on themselves no matter how lavish their lifestyle (think about it, a fifty story skyscraper in midtown Manhattan costs about a billion)— but the thinking about the Target Market was absolutely correct. Look at Buffett, whose approach wasn’t too disimilar in terms of limiting clients and having strict rules, except in Buffett’s case the returns were real.
And remember, it’s always easier when you keep marketing and branding in mind.
TODAY'S TANTILLO TAKEAWAY -
Knowing your Target Market means knowing what they will and will not expect from your brand.
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