Understanding Your CustomerJun 27, 2022
Who is your customer? What do they look like? What do they buy? How do they buy it? It is very important to know who your customer is. I'm not talking about getting to know individually all your customers. Although many business owners are exceptional at relationship management. What I mean is knowing the demographic and psychographic characteristics of your customer. Those are big words that mean what your customer looks like and how they behave. For this blog we will talk about those characteristics and how your business can meet their needs and finally how to invite them or introduce them to your product and services.
First, let's take a look at your customer. Do you see them? When you go through this process it helps to actually have someone in mind. Do you have current customers? Who is the one person who exemplifies your target market? If you have them in mind, write down their characteristics. If you have a group of customers in mind, then use their characteristics as a range of identifiers. For instance, are they married? Do they own a business or are they part of the executive suite of a business? What is their annual income? How old are they? These are the external characteristics that will help you understand your customer.
Next, we need to go below the surface of what we can see and discover how your customer thinks and feels. Their buying behavior. Many colleges now are offering a degree plan in the behavioral finance. What makes your customer buy one product over another? What are their needs? Take some time to get into the mind of your customers. It may even be useful to take some to lunch and interview them. If your business isn't that personal, then a survey might be useful. This isn't the place to talk about what makes a good survey, but there are many resources out there that can help. Some of you may remember the chain store Blockbuster. It went out of business because it did not understand it's customer. They didn't realize how customers wanted to buy their products. Even after Netflix offered to partner with them in streaming their videos, Blockbuster kept doing business as it always had. It is no more, all except one store.
In the past, the industrial revolution, businesses would make products and then convince their customers of how much they need them. That worked for a while. During that time invention was high and there were so many new products that customers had to be introduced to them to know anything about them. A shift towards a more customer centric approach happened in the 70's but still put a great deal of emphasis on convincing people how much they needed what was being offered. In the 90's, Steve Jobs after taking back control of Apple, began to see a difference in the way people listened to music. Pairing that with his already user friendly operating systems philosophy and his new iOS, the iPod was born. In his book, Value to Others, Dr. Chris Mason says that if you focus on the needs of others you increase your own self-worth and personal success. I think that applies to our products and services. Finding out what our customers needs are and how we can meet those needs becomes your Unique Value Proposition. It is what sets you apart from the other businesses in your market. The other day at a meeting of business owners, I heard one of the attendees talk about how his business was hurting during the pandemic. It was difficult to hear how the drastic response to COVID have hurt so many businesses, some unable to recover have gone under. My heart broke for him, but I felt like I could help. I asked to set an appointment and we began to talk about some strategies he might engage to find opportunities in what looked like a dire situation. He was appreciative and we both discovered some hope in the process.
So once you know and understand your customer, discover their needs and how your products and services can meet those needs, what next? We need to invite our customers in, introduce them to our products and services. This is where a marketing strategy, not advertising, will need to be discovered. This is a journey and not a one size fits all solution. Vision will drive your marketing strategy as well as what you have found out about yourself and your customer. Although I can't tell you a step by step marketing plan, I can give you a starting point in deriving your strategies. One of the first questions to ask is what has worked in the past? Then ask why. Then ask why again and again until you get to the foundation of that experience. You might say, we gain clients because of our location. Why? Because we are located in an area of high traffic for our target market. Why? Our location is near two large employers of young adults and a college. Those young people like the convenience of being able to get the things they need within walking distance. Why? Because this area is a community and we are a part of this community. From this exercise we discovered that the business has done well in areas where there was strong community. When they engaged with that community, people felt loyal and loved being able to get there on foot. Knowing this, the business may structure its advertising more in line with building repour with the community. They may also invest in signs that help people locally know how to find them. Also, using Google to get reviews and first page search listings for the number of blocks for that community. The key here is to really put some time first in understanding your customer and, in light of your vision, prepare a marketing strategy.
What if you are new and haven't had previous successes? For the new business, connecting with clients is imperative. You need to be visible, but that invitation to your clients must address their immediate needs. Knowing your customer and how they buy, how they think, and where they buy will give you a starting point for marketing. You may choose a strategy and then after a few weeks, decide that it is not working, then try something else. To quote Jim Collins, author of Great by Choice, "fire bullets, then cannon balls." What I mean here is to start with small investments in marketing then, when you see results, go big…or at least as big as you can. When you make small investments first, you can be more agile in changing directions if it doesn’t work. There are times when something works, but you have an idea that might work better. Part of the decision making process is determining what is the impact. If you spend $1 in marketing and get $3 in return, that is good. However you might find that you could spend $1 in marketing and get $12 in return. That is impact! I had a client that was spending thousands on internet and social media adds, billboards and radio adds. After months with good but not great results we analyzed their spending. They had asked all new customers where they heard about them. From this we discovered that the impact in the social media and internet ads was several times that of the radio and billboards. Unfortunately, they hadn't fired bullets and then cannon balls. If they had, they would have saved thousands on those medias that had little to no impact.
I hope this helps you to move towards a better understanding of your customers and helps you align your marketing strategies with those customers. Please write a review, tell us what you think! I also have a podcast on Spotify, iTunes and Youtube called "Coaching for Profit". Visit our website at www.bkm-cpa.com or give us a call at 844-316-6528. BKM pc Certified Public Accountants, Your Virtual CPA Firm!
Stay connected with news and updates!
Join our mailing list to receive the latest news and updates from our team.
Don't worry, your information will not be shared.
We hate SPAM. We will never sell your information, for any reason.