Understand Your Customers, Build Your Business

Pay attention to your customers. When you spend the time and energy required to understand your market and the needs of your customers, your bottom line will take care of itself. Rather than become annoyed or angry at your clients for not understanding you or your business, find out what they think, want and need. When you deliver a product or a service that matches customer’s needs, you deliver value that will make your business profitable. The following steps can help you begin a new emphasis on understanding your customers.

Define Your Target

You probably have expertise in creating or marketing a particular product or service. To you, the product or service makes sense and should take hold in the marketplace, because of its exceptional design. Customers think differently. Customers have needs based on situations and conditions that business owners often fail to recognize. Decide to change that today.

Spend some time creating a profile of the type of customers you intend to serve. Start by asking fundamental questions about that client:

  • Age, gender, business customer or consumer.
  • What will the person do with your product or why does the customer need your service? Why do they need it?
  • What lifestyle does the consumer lead, or what markets does the business client serve?
  • What about your product or service doesn’t meet the needs or expectations of your customer?
  • What do you need to do to add value to your product or service, so you can sell it at a profitable price?

You might discover that you intend to serve customers who neither need nor want what you have to offer. If so, find out who would find your product useful and market your business to them. Of course, you might discover that you must change the goods or services you offer before you can have a viable market and marketing plan.

Discover Your Market

When you align your products and services with the consumers and business customers that want or need them, your business will naturally grow. After you have defined your customers, find out where they are, what they do and how you can reach them. This information will help you develop an effective marketing message and strategy.

Many public and private data sources exist that can tell you all about your target customers. You can find out their age range, their average income, where they live, and what they do. You can learn about the typical education level of your target market, how they spend their money now, and how they might spend their money if they knew about your business.

Business customers come in various forms including distributors, retailers, professionals, tradesmen. Business customers might serve the public sector, private sector or both.

The data you need might come from the Census Bureau, trade organizations or syndicated data providers. Public libraries often maintain subscriptions for the most popular data sources, so you can get much of the information you need for free.

When you spend time discovering your market, you might also find that you must tweak the profile of your target customer. Do this as much as necessary until you find the customers and the markets that you can serve by delivering value to them.

After you scour public and private data sources for market information, you might want to gather some primary data of your own. You can hire marketing research companies to survey your market to learn about their needs.

Deliver Value

After defining your customer and discovering your market, you need to deliver value. Your strategy for providing value might take one of the several common forms:

  • Product or service differentiation: What can your company or your product do that other businesses and products cannot?
  • Low cost: What can your business or your product do at a lower cost than alternative solutions?
  • High Quality: Compete by providing a product or service that exceeds the quality of your competitors.

Depending on your product or service, a low-cost strategy might not offer enough margin to make your business profitable. Almost every industry has low-price leaders that make competition difficult for a small to midsized business. Wal-Mart and Amazon, for example, have driven prices so low that few companies can match them.

A small to medium-sized business often can compete based on quality, but require a lot of time to develop a solid reputation. Also, many other companies likely compete based on quality in the same market. Additionally, the financial investment required to compete based on the quality of goods and services delivered often creates a major barrier to entry for small to mid-sized businesses.

A Differentiation strategy, however, offers ways to add value and gain a competitive advantage in your market by providing something unique to your market. When you seek to differentiate, you can develop your strengths to deliver valuable goods or services that few other companies, if any can replicate.

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SMB Reviews
SMB Reviews 473 posts

SMBReviews is committed to providing small and mid-sized business owners with the information and resources they need to select the best service or product for their company.

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