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On the weekend I was involved in the auction of a family home. It was a unit in a leafy suburb of Melbourne, close to all amenities. Very easy walk to shops, library and trams to the city. An extremely desirable location for a number of buyers.
For a small family buyer, it had great access to some of Melbourne's top private schools and a lower cost entry in a suburb where a standalone family home would be very expensive. For an investor, it was an area where the vacancy rate was extremely low, in a high income area with strong capital gain.
It was also an ideal location for a retired couple looking at downsizing. The location could have been attractive because their family home was also in the same leafy suburban area and they wanted continue to live in the area they loved. They may have had children living in this highly sought after area. They may just wanted to live in this highly desirable area with many facilities for retired people, which is why the original owners bought this unit.
The original owners had spent 3 years to find an opportunity to buy into this area, but now with one passed on, and the other in care, their unit was on the market.
For the small family buyer the issue was always going to be the size of the mortgage they would need for this property.
For the investor, the rate of return was their most important consideration.
For the retired couple downsizing, price was not an issue. They would always have money left over from the sale of their larger home, but with the risk of losing this property, and spending 3 years to find another in such a location, they were not prepared to lose this opportunity.
The retired couple were the best buyers for this property. Price was secondary. There was an urgency, and the opportunity was scarce. Of course they won the property, buying at a price, even in this very soft property market, well beyond they current owner's expectation. The new owners just had to have it.
When marketing this property, the agent's focus was specifically on this demographic, because it was well understood that they would be the best buyers.
Who are the best buyers for your products and services? Have you identified your demographic? What makes them have to have what it is you sell?
In most businesses, 80% of the value comes from 20% of the buyers- your best buyers. What would happen to your business if you increased the number of best buyers from 20% to 40% or even more?
Analyse your customers, understand who are your best buyers and why they are your best buyers, and you have the formula to double your business.
May Your Business Be - As You Plan It!
Dr Greg Chapman - The Australian Business Coaching Club
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