Understanding your customers
A surprising number of small businesses know surprisingly little about their customers. Yet getting to know your customers, or market, is one of the most beneficial things you can do for your business. When you who your customers are (and aren’t), and why they buy your products and services, you can target and tweak your marketing accordingly.
On this page:
- Getting to know your customers
- Bringing in the experts
- Other benefits of understanding your customers
Getting to know your customers
Many small businesses have a limited advertising budget. If you know and understand your customers, you’ll get the best return for your advertising spend, and not waste time and money marketing to those unlikely to buy from you, or marketing in a way that doesn’t appeal to your existing customers. Because the way we receive information is constantly changing, evaluating how to best reach your market should be an ongoing process.
You should be able to answer briefly and clearly what types of customers you cater to, or plan to cater to. If you can't, then you need to find out more about your customers.
Start-up businesses
Assuming that you have done some research and established that there are people who do want to buy your products or services, you should then ask yourself:
- What are the demographics of the people likely to buy my products and services? (Age, income bracket, occupation, area where they live, students or professionals.)
- How do my products or services beat my competitors? (You must know what your competitive advantage is.)
- How do my typical customers prefer to get their information? (From newspapers, radio, magazines, or online.)
These answers will help you determine how to best target your marketing and provide information that will help you fine-tune your ideas. For example, if you’re targeting young female professionals, there’s little point in having your glossy catalogue included as an insert in a magazine largely read by women aged 50+. If you’re selling top-end luxury products, will community newspaper advertisements really fit the image your business wants to portray, or would you be better off advertising in special interest magazines or on websites relevant to luxury consumers?
Also consider how you will appeal to your customers through your advertising text and graphics. Teenagers will expect bright colours, busy graphics, and references to relevant pop culture, while working mums will appreciate more feminine visual appeal and having the benefits to them clearly spelled out in a spin-free manner.
Existing businesses
To get to know their customers better, existing businesses could use online, in-store or email surveys to find out relevant information. Selecting a small group of best customers (called a focus group) and asking them questions is another option, best suited to finding out what customers like about your business and what they feel could be improved, rather than learning about their demographics and preferences. Remember to thank customers who take part in your surveys. You can offer a discount, or enter them in a draw to win some free products.
You will probably already know the typical age bracket and gender of your customers. Further questions to ask are:
- Where do they live?
- What are their interests?
- How did they first hear about your business? (From a newspaper or online ad, word-of-mouth, passing by the premises, or Internet search?)
- Why do they keep buying from you? (Quality, friendly service, good value, convenient hours, or handy location?)
- How would they prefer to receive information about your business? (Via e-newsletters, your Facebook page, Twitter account, newspaper ads, or posted catalogues and newsletters?)
The answers will help you learn more about your customers’ habits and preferences and how you can best reach them with your marketing. For example, regular newspaper advertising would be a waste of money if your customers prefer to find information online. If customers think your service is the best in town, you could start highlighting this in your advertising and on your website stating that you guarantee fast, friendly service and now offer a kid’s play area in-store.
Remember to always take note of what happens after you have carried out an advertising or marketing campaign, to see what works and learn from what doesn’t. Find out more about how to Plan your marketing.
Bringing in the experts
If you have the money to outsource your customer research and marketing strategies, you’ll need to shop around and ask some questions to make sure you find a company with a proven track record, whose skills match what you want to achieve. Online searches are an easy way to find marketing companies.
Ask companies what they specialise in. If it’s Search Engine Optimisation or web marketing, this won’t help you get to know your customers. Can they supply testimonials or show you case studies of what they’ve achieved? In addition, make sure you are clear on fee structures before you sign anything – do you have to pay the total fee upfront or are fees based on performance?
Outsourcing your customer research and marketing strategies will generally be pricey, so carefully consider whether you can avoid this expense by doing the work yourself. Also consider whether professional advice is going to yield returns big enough to justify the expense of paying for their help.
Other benefits of understanding your customers
In addition to helping you plan an effective marketing and advertising strategy, knowing your customers and what they think about your products and services enables you to tweak and change your business to meet customers’ needs.
For example, you might discover that customers find your weekend opening hours (or lack thereof) inconvenient, or that they feel their emails or phone messages are not responded to promptly enough. If you’re in a service industry, are customers telling you they would be happy to pay extra for a drop-off or delivery service, if you offered this? Aim to immediately fix problems that can be solved at little or no expense or inconvenience to you, and brainstorm ways to address the more complicated issues.
Successful businesses make the effort to learn a lot about their customers and then act on that knowledge. The golden rule is: ask lots of questions and make sure you take action on the feedback you get.
Always bear in mind that markets can quickly change as technologies become obsolete, government introduces new legislation, competing products hit the market, and for many other reasons out of your control. The better you know your customers and their changing needs and preferences the better prepared you'll be for possible changes.
