Successful businesses don’t seek out everyone
Imagine a business owner going through the decision process of where to locate their new business. As they look at the candidates for the location, the most probable question would be, “Who lives and works around here that would be a customer of my business?”
Researching the answer to that question, the business owner will make decisions about what to stock, and in what quantities for all the merchandise the business will offer. The same goes for services the business will offer. The logic behind this is that the business owner wants to have plenty of the products he will sell on hand so that the staff does not have to send customers to the competition. At the same time, the business owner does not want to have money tied up by having too much inventory on hand for customers that are not likely to be shopping in his business.
While not the only component of the successful operation of a small business, understanding the customer base is one of the main components in having a profitable business. In reading this article you most likely are not the person being described as opening a new business; you likely already own a business.
However, performing the exercise should not be restricted to those that are opening a new business. It is an exercise that every business should perform, and with a plan to review it every year – just to make sure you are on target for a potentially changing market.
The process is actually easier for an existing business. Thinking of the existing customer base, the business owner will want to consider which customers frequent the business the most. Consideration should be given to those that spend the most; those customers that contribute the most profit to the business, and perhaps even those that are the easiest to deal with.
Using a road map of your area and push pins of various colors, you can begin to ask customers a series of questions to learn more about them. As an example, to learn what hours you should be open you can ask each customer, “How far is your commute to work or school?”
If the customer’s answer is 10 minutes or less you give them a push pin of a certain color. For answers of 10 to 30 minutes you give them a second color. For 30 minutes to 45 minutes you use another color, continuing this process for as many categories as necessary. Then ask the customer to put the pin in the map where they live.
Repeating this process for several days, you will have information that will help you to decide how early you should open and how late you should be open each day. What else would you like to know about your customer?
How about learning how many children are in their home? What if you asked if they used coupons? You could ask about hobbies or other interests.
Without asking questions that delve into this personal information, you can learn about your customer so that you can tailor your business to your customer base.
Do you need to offer other products? How about some new services? Do you offer to make deliveries to homes or work nearby? Should you be offering evening hours for customers to shop? The more you can answer these questions, and any other questions that are relevant to your business and your customers will help you to better target your business.
Why should you do this? Because when you can sell more items to each customer, as compared to selling a single product or service to many customers, you will find it much easier to do your marketing. You will also find that when customers are more dependent on you, because you sell more of the products and services they need, the customer becomes less likely to be wooed by your competition to do business with them, and less likely to leave your business.
Who is your customer?