Regardless of what product you produce, which service you deliver or what market you operate within, you need to know and understand your customer. This is the very most basic building block to a successful business, without it you’ll fail to achieve the sales that you’ve otherwise so carefully planned toward. Within this blog we take a look at just how you can do this in 6 simple, straightforward steps.
1. Gain a comprehensive understanding of the problem you want to solve
Don’t begin with the product you manufacture, nor the service you provide, think instead of the problem, or problems, that you seek to solve. Once you’ve established this, it’s easier to identify just who it is who has this issue.
2. Drill down into those who suffer from the problem
Next, write a list of the typical people whom you imagine suffer from the problem you solve; from here you can think about the things that define these people by demographic, such as:
- Where they live;
- How old they are,
- What gender they may be
- What their income level is likely to be;
- What their education level is;
- Whether they may be married;
- What occupation they might have.
Beyond these demographics you should also consider the ‘psychographics’ of your target market, namely their:
- Personality traits;
- Lifestyle choices;
- Interests, hobbies and pastimes;
If you sell business to business, you should consider:
- What sector they may operate within, be this service, manufacturing, PR or any other realm;
- How large their corporation may be;
- Where they are based, and whether they boast multiple locations.
3. Consider who, amongst these people, suffer the most from the problem
Selling a product or service to an individual is all about successfully communicating the difference between having your offering, or passing it up. If you’re able to demonstrate that your customer will be better off by purchasing from you, then you break down the barrier between them buying, and not.
Key to this is homing in on the people that you’ve identified as suffering from the problem that you solve; amongst these you must decide who suffers the most.
4. Weigh up your market
Companies who target niche markets do so for a very good reason: they are better, and more precise at solving the problems of their target customer than companies who sell to mass markets. And increasingly products and services are becoming ever more niche targeted, where the best of businesses focus in on personalising their customer’s experiences.
This may not only continue to help you identify your core demographic, but may indeed influence your very product or service.
Segmenting your market
Segmenting your market allows you to drill down into the potential customer base for groups of people who you want, or are physically able, to market to. You should ask yourself these key questions:
- Do you want to appeal to particular types of consumers within the groups that you’ve identified as needing your product or service?
Demographics, such as disposable income or education level, may well provide impetus for targeting a different demographic to the one that may be most suffering from the problem you solve, where such a group has more resources for purchasing from you.
- Do you wish to target those within a certain location?
You will certainly need to if you’re a local company who operates within the local realm.
- If you sell business to business, do you wish to target very specific companies?
Being able to tightly identify companies who you’ll target will help you frame your branding message in a way that ‘speaks’ in your target market’s language.
5. A final pointer that may influence your target demographic
Finally you should also consider whether your specific product or service has any special features, or your company and employees have any ‘specialist’ areas that would clearly point to targeting a certain market. This may range from holding knowledge upon a certain location to simply working alongside particular types of individuals better and more successfully.
6. Once you’ve established your target demographic…
Now that you have clearly identified who it is that you should be targeting it’s then time to think about what it is that you have to offer that is unique. A Unique Selling Proposition (USP) is really an essential within the business world, as it helps consumers to justify their purchase from you in particular.
The key to this is how you answer this question: How is my company uniquely positioned to solve the problem my target demographic suffers from?
If you find that you can’t answer this question, then you’re either homing in on the wrong target market, or your product or service isn’t solving a pain point within the consumers you have identified. In either event, it’s essential that you re-assess both of these, and consider again whom it is that you’re targeting.
Moving forward: Why profiling your customers is essential
Profiling your customer is, in the most basic sense, gathering as much information as possible upon your typical customer. Once you’ve drilled down into the market and found your target demographic, this process should then be relatively painless.
Typically you should be able to write a description of the average customer, including their interests, age, location and all of the other demographics that we listed in step two. Named personas, such as Mary, Bob and Helen, should be used to represent each of the customer groups that share characterises. These can then help inform business decisions and guide product and service developers.
What’s more if you’re already up and running with a significant customer base you can begin building a database of customers, where purchase history, customer satisfaction and purchase frequency are listed. This step is key to understanding how much effort you’ve put into certain segments of the market, as compared to how much return you’re receiving (known as Return on Investment). This can help you in further refining your offer to appeal more to the most profitable groups within your customer base.