Who Really Are Your Customers? A 4 Step Process

When I was in the advertising business, I would always ask my clients “Who are your customers?” I would quite often get the common response of “Everyone.” Even if I would question further, I got the same response. I finally would start to talk about categories like most frequent customers and those that only came in around specific times of the year and we started to get a better picture.

Those retailers were not unlike many other small business owners. They want to claim everyone as their customer, when in reality, there is only a certain percentage of people who would use that business’s product.

One of the ways to look at segmenting a business’s customers is break them into the users or choosers. Quite often it is not the users who are buying the product but rather the choosers. Both audiences need to be marketed to but in different ways and the business owner must know the motivation to buy or recommend behind each segment so the marketing efforts can be successful. Realize by knowing these motivations, the business increases its ability to drive sales up.

A business owner starts a customer profile by letting go of the myth of “everybody is my customer” and really thinking who are my most frequent buyers. The owner should also know what motivates them to buy or the product’s benefits and features. Here you want to learn about client’s values, attitudes and lifestyles.

The second step in profiling customers is to learn their buying habits. Where do they shop, spend money, spend leisure time or even more important, where are they using your product? Knowing where they are using the product allows marketing to be not place but time specific which increases the results of the marketing the business is doing.

The third step is to determine how many of the ideal customers are really out there in the marketplace. Knowing age, marital status, home-ownership and other descriptive criteria will help in rounding out the picture of the top customer.

The final step is to start using this new found information to better target the marketing being done. Ask the question – “who is my marketing currently reaching and do they look anything like my ideal customer?” If not, then revise your plans and change up a few things so the message is reaching the right audience.

Your local small business technology development center is available to help you in determining the correct audience by calling 573-243-3581. 

Habits - Good or Bad - We've Got Them

Habits are a mixed breed of human behavior. Some are good and some are not so good for us. We all have habits we wish we could do away with and behaviors we would like to make habits for us. I know I do and every day I am reminded of them. That reminder serves as my change agent to work harder at changing what I can and to accept what I cannot change.

Well in the business world, we have to make changes as our customer's habits change. We don't have the luxury of staying the same all the time because our customers do not stay the same. The Model T is a prime example of how it did not change but yet today the American auto industry still seems to live in the mindset of "I have every color you want as long as you want black." The industry had to have a big jolt of reality before it could start making changes to reflect the American car buying audience.

Habits have an effect on not just large business but small business also. In fact, habits probably have a faster effect on a small business's bottom line because of how close it is to the ultimate customer. In small business, the owner is often in front of the customer while in big business, the owner is many times removed.

So how can a small business owner change his or her habits and improve the bottom line? The first thing an owner should do is make sure the inventory is in line with the customer's needs and desires. Consumers change over time and what was needed last year may no longer be needed. So if you don't update your inventory you may be selling last year's fad which is this year's junk(bad habit). So talk to your customer's - ask them what they would like to see you carry. Ask them about how they see the market changing and what their expectations are (good habit). Involving the customer in your decision making process is one way to make sure your habits on inventory are changing and you don't get caught with your pants down.

Then once you involve the customer in your store, it is easier to ask them to buy more - the second thing you can do to change habits. Many times, small business owners are happy to get the order (bad habit). Once you have the order, then is the time to ask how else you may help them and grow that customer in terms of sales. It may be a purchase of an auxiliary product, something totally different in another product line - whatever but do the ask! (good habit)

The third habit to change is complacency with the competition (bad habit). We all know competition is there and more of it every day. It is surprising to me when I talk to a business owner and they say they have no competition. Bull Hockey! We all have competition. Heck even I, as a free service, have competition from for profit sources. So go out there and shop the competition (good habit). Have friends and family members go to them and shop them. Check out the customer service, inventory, policies, etc. Get to know them so you can identify their weaknesses (and yours) and build a stronger case for "why buy you."

Next recognize the value of the repeat customer and start paying attention to her. It is not a good practice to offer new customers something and not the existing ones (bad habit). It is on average nine times more expensive to acquire a new customer then to keep an existing one. So reward the repeat customer (good habit). How? Try a customer loyalty card, customer appreciation events, insider sales, preview sales, special packaging or services etc. Give them a reason to come back more often and buy from you. Many times these special services are not expensive when compared to the sales they generate.

We are all creatures of habit so reinforce your customer's habit of shopping with you with your own good habits. So I invite you to share with us some examples of good and bad habits you may have or have witnessed in small business. Let's talk about them.....