Understand how to identify your best customers for better marketing and better results.
Twenty years ago, when I started my marketing career, most businesses didn’t understand who their best customers were or were likely to be.
With mass marketing strategies most common it was hard to know which adverts or media would work best. We applied a scattergun approach by trying many different tactics. We’d then hope we could measure the success in an increase in sales.
This scattered approach meant we reached people who weren’t interested in our product or service. Which means a lower return on investment.
I’m pleased to say that this situation has changed. There is plenty of data available that can help you to understand who your ideal customer is, and what they will respond to. By defining which customers are most likely to buy from you, you can target your message to them.
The result – more attention from your potential customers, and a higher likelihood of turning that enquiry into a sale.
Small business owners – heads up! Not everyone is your customer!
I attend a lot of events with small business owners and one of the things I love to ask them is “who is your customer”. I get excited when I find they can explain just who this is. But in many cases, I still hear business owners say it’s everyone.
In a small market like New Zealand, of course, it’s important that you make as many sales as possible. As a business owner myself, I completely understand the need to make money wherever and whenever you can.
Appealing to everyone may look attractive. With a wide group of target customers, you can make more sales. Right?
With the limited resources available to New Zealand businesses, it’s not possible to be everything to everyone. Your time and money are best spent where you will get the biggest return. And it will allow you to tailor your message to each customer group.
Here’s an example to demonstrate what I’m talking about.
You’re a gym owner and you want to develop a campaign to grow your membership. You know that your gym appeals to people who want to get fit, want to build muscle mass, lose weight and run the next Auckland Marathon.
You could run a campaign that tells your customers they could get fit, stronger, lose weight and be ready for the marathon.
Or you could target those that want to lose weight with a campaign that says they could lose 10kg by completing the 6-week challenge, designed specifically for weight loss.
The first campaign requires the customer to hunt through the benefits that are relevant for them. They discard the remainder of the message as it isn’t relevant. And they are left wondering how they would achieve their goals. If they enquire about the gym, it’s still going to take a lot of effort to convert them into a member, and you may not offer what they want.
The second campaign is more targeted and answers many more questions for one customer group. The customer immediately knows the benefit of completing the challenge and how they will achieve their goal. They are a qualified lead and may even make a decision straight away.
Of course, if you have the time and money, then you could create a specific campaign for the other target customers too. Which would allow you to grow even faster.
4 steps to identifying your best customers
You wouldn’t build a house without a strong foundation because eventually, the roof will cave in. If you build a marketing plan without a target customer, eventually that too will come tumbling down.
Knowing your target customer will allow you to find the right place to advertise, to make sure that your product or service is right, and make sure that the message in your communications is on point. It anchors everything.
Most people define their customers by their age, gender, income, and location. These demographic factors can all be important but more important is the customer’s need.
The customer’s need is what drives them to seek out your product or service. If your product or service answers their need, then they are more likely to buy.
To define your target audience, ask yourself these 4 questions:
- What motivates my customer?
- What’s on my customer’s mind?
- What worries do my customers have?
- What makes my customer happy?
Answer these questions generally (not just in relation to your business), and you will find that you will have customers with similar needs.
Use these needs to group them into 2-3 groups and then delve further into demographic factors that they may have in common. After all, those with similar demographics often have similar needs.
If you can’t answer these questions, then talk to your customers and ask them. This could be as simple as asking your customer next time you are speaking to them or could be a more formal survey or market research.
If you think the survey route is the way to go, it’s best to work with someone who has experience putting these sorts of surveys together to ensure you are asking the right questions to get the responses you are after.
Whichever direction you take to answer those questions, a defined target audience will put you in a much better position to implement a successful marketing plan that will engage with this group, gain new customers, and ultimately grow your business.