A key marketing issue is getting to know your customers and being able to identify your target market. You cannot market effectively unless you know your customers.
You should already have a customer base and have some idea about who your customers are.
Where your business is located, and what products or services you offer, influences the type of customer you attract. Some businesses have regular customers, while others rely on the passing trade.
Too many businesses try to reach too wide a market, while providing as complete a range of products as possible. As a result, they can only carry a limited number of each item and many customers end up having to look elsewhere.
To be most effective, each business should aim to attract those customers, or potential customers, who are most likely to want their particular products.
These customers are called the target market. Once the target market has been identified, a business can streamline its whole operation to serve that particular market.
How to analyse your customers
The first thing to do, is look at who your customers are now. This involves standing back and looking at them a bit more analytically than usual.
You will have to work out what segment of the market your customers fall into.
First, however, you will have to work out exactly who your customers are.
For example, you know Chris Johnson is a regular customer, is one of your favourites, is pleasant to deal with, and always tells you a quick joke when leaving.
But now you need more information to work out how Chris fits in your target market, such as the area in which he lives, his age group and why he comes to you rather than to a competitor.
If you don’t know this information, there are simple but effective ways of finding out:
Ask. You can ask for general details, such as postcode, or how the customer heard about you. Or you can ask for more details if you think it is appropriate. People are generally obliging if they can see a future benefit, so tell them you are looking at ways to provide them with a better service.
Make lists. Assess your customers as they come into your premises and place them into categories, such as life stage, gender, frequency of visits, assumed income.
Collect business cards.
Offer a reward program to frequent customers and make note of their names and addresses.
Offer a free product or service if they complete your customer assessment survey.
Finding a pattern
It is unlikely that all your existing customers fall neatly into one specific segment in the market. However, you might find that a discernible pattern emerges.
For example, the female population is one market. The female population in the 15 to 24-year age group is a smaller segment of that market. This can be further broken down into residential areas.
You could also categorise customers by income, age, family education, occupation, religion, ethnic background, language, life-cycle stage or type of accommodation.
Having your customers fall within a specific segment has the following benefits:
You can estimate your market’s potential size
You can identify its specific needs
You can tailor your marketing to fit the needs of your market.
This way you can focus your products and marketing at this particular group. This will help direct your marketing strategies and, by being more effective and efficient, reduce your marketing costs.
Any noticeable grouping of customer type and products should become apparent. You may also have to create your own chart to take this a step further, depending upon your own circumstances.
Good and bad customers
Attracting and keeping the right type of customers can make all the difference to your business. If you attract the right customers and offer them exactly what they want, they will remain loyal to you and more importantly, tell all their friends. A great way to get new business.
Your aim, therefore, is to keep your best customers happy and so attract other soon-to-be best customers.
On the whole, it is far cheaper to provide an excellent service to your existing customers than it is to go out and find new customers, as the following statistics show.
On average one dissatisfied customer will tell 11 others, who on average will tell five others. That’s 55 pieces of negative advertising from one disgruntled customer
96% of customers don’t complain when they have a problem. They just don’t come back
The average Australian business will lose 10% to 30% of its existing customers this year – mostly due to poor service
68% of customers who stop dealing with an organisation do so because of a perceived indifference on the part of the organisation
Because less than 4% of unhappy customers actually complain, management is lulled into thinking all is well
It costs between six and 10 times as much to gain a new customer as it does to keep an existing one.
Unhappy customers can create a huge amount of bad publicity for your business in a remarkably short space of time. And this sort of publicity is bad news for your business.
Keeping customers satisfied
Statistics for good customers service:
Of those customers whose complaints are resolved, 83% will remain loyal and each will recommend you to five others
Businesses who have a reputation for excellent customer relations and quality service charge up to 9% more, grow twice as fast and pick up market share three times quicker than their under-performing competitors
Quality, value and reliability are the most popular reasons given by most business patrons who describe themselves as regular and loyal customers.
We all know how much value we give to word-of-mouth recommendations. If a friend praises a business or organisation, we are far more likely to believe them than any recommendation we come across in a newspaper or magazine.
So, naturally, if we’re told that a business takes pride in helping their customers, and goes out of its way to resolve problems, we’re more likely to choose that business over a competitor.
Similarly, if a friend tells us that they’ve had a dreadful experience somewhere, we would probably avoid that business or organisation.
Consequently, it is important that you identify your better customers and nurture them. You will find that time spent sorting out their problems will be repaid many times over in their satisfaction with your service and products – and their onward recommendations.
Therefore, you need to:
Be customer focused
Provide a quality product
Have great communication with them
Monitor and anticipate their needs and issues.