Do you really know who your customers are?

Do you define your market as, say, “consumers” or “SMEs"?  Do you understand why such a definition is pretty useless?

You need to divide your market down further into particular types of customer, for example

o “Owner-managed businesses in the RG postcode with between 5 and 50 employees” or

o “Builders on the local council suppliers list who do not have an internal H&S manager” or

o “Women between 25 and 35 who are fashion-conscious but on a budget.”

- It helps to give them a name – for instance a supermarket chain might categorise some of its customers as “Northern Brand Loyalists” and others as “Sausage-and-mashers”

- A customer category is another way of describing a market niche

Why have customer categories?

- It will help you make decisions about which customers you want – and which you don’t want

o Which customers are more profitable – and which are a nightmare to deal with?

- It will help you understand why those customers choose your product or service – or that of your competitor

o Which benefits are more important to them – and which less?

o How well do you match those desires – and how do you compare with the competition?

- It will help you develop propositions which are tuned to the customers’ requirements – even if the base product or service is the same

- It will help you quickly and easily communicate the type of customer you are looking for

- You should strive to be number 1 or 2 in your market. If you are not big enough to achieve this in the whole market you can focus on a niche (a customer category) where you can be number 1 or 2 and so dominate.

If you'd like to know more about how understanding customers can drive your business growth then this event is for you

See more advice for business owners here