Marketing and Sales: Knowing your customer is the path to growth

In past articles we’ve talked about the importance of planning, how good I am at falling off a horse, and the importance of staying on a course long enough to determine if it’s working or needs adjustment. Now it’s time to turn to the key topic of understanding your current customers so you can find more of them to grow your business. To torture a well-worn aphorism, “If you don’t know who your customers are you may wind up with someone else—or nobody.”

The challenge for any business, from a retail shop to a large manufacturer, is to effectively reach potential customers. But before that can happen, it’s important to understand where they are and what will get their attention. The good news is this doesn’t need to be a long, complicated, expensive or technical exercise—you just have to do it.

First, consider your current customers, if you have them. (We’ll get to start ups later.) Who are they exactly? For a business to business (b2b) company understanding these attributes are critical: What industries do they come from? What roles do they play in their companies (technical, marketing, finance, executive, etc.)? Why do they buy from you? How important are your products or services to your customer’s success? Where do they fit into the customer’s “big picture”? The good news is this information is relatively easy to gather—just ask them. Use a tool like Survey Monkey. Send out a questionnaire. Call them to ask. It’s tedious work, but in the end you have a profile which will enable you to look for prospects that look just like your current customers. (We’ll save branching out from your base for a future column.)

If you’re just starting the hunt for customers, you had better already know the answers to those questions and a lot more besides: What problems are you solving? How is what you’re offering better? (If it’s just “different” that opens up an entirely different conversation.) Who, or what other offerings, are you competing with for potential customers? As with established businesses, it pays to ask. In this case it’s a bit harder to do, but with a hypothetical profile in mind it’s possible to rent targeted lists of names, run focus groups or input sessions, in short, present your case to a sample of potential customers with the specific goal of feedback in mind, and see what you find out. It may be that your story resonates strongly, or you may find your hypothesis was way off base, but either way, you’ve got the information you need to adjust before you spend money going to market.

Understanding your customer is not just for b2b businesses. If you’re a retailer, restaurant, performance venue and the like, it’s every bit as important to know your customers in order to get new ones. Yes, a storefront window is an attractant that, say, a software company doesn’t have, but passively waiting for new customers to wander in is a rather chancy business in an already risky world. The good news is you’re probably already talking to your customers and mentally filing their likes, wants, needs away in the back of your brain for later use. I urge you to take the time to be more organized about it though. Be proactive. Reach out. Offer a small gift in exchange for information. If you already have a mailing list of customers, use it for more than announcing sales or daily specials. Ask them to share information about themselves. This lets you better review, consider and adjust your approach, but more important, this information gives you the data you need to find more of them. For a clothing shop the profile may be a “female, aged 18-25, single, college student or recent grad, limited disposable income, likes unusual styles and colors.” With that information you can target your outreach to (as Willie Sutton never really said) “where the money is” through advertising, mailings, social media, or whatever tools are appropriate to reach that pool of potentials. Substitute “married, 35-54, foodie, loves good service and fine wines, locally sourced food” and you’ve got your restaurant’s profile.

The bottom line is straightforward: you can’t effectively find more business if you don’t know who to target, and spraying the entire market with your message is not only incredibly inefficient, but it’s also often a “false positive” in the sense that you think you’re doing something useful, but in reality you’re just tossing yourself out there and hoping someone notices. It’s much better to know who you want to reach and then go find them.

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