Understanding Your Customer

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1.4 Why is it Important to Understand Customers?

Customers are not as trusting or as loyal as they used to be. The proliferation of goods and services available on the Internet has become a two-edged sword. On the plus side,

consumers have a greater number of choices. However, there are also a greater number of inferior products or services that might leave the customer disappointed.

Social media, easy on-line comparison-shopping, and an explosion of choices have given consumers more power than ever before. A shopper can easily scan a product bar code with a smart-phone and find out what it is selling for in other stores, or pull up consumer reviews and product comparisons on the Internet.

In order for you to reach and convince the right customers to buy your product or service, you need to understand who those customers are.

1.5 Researching Your Customers

Effectively marketing a product or service requires knowledge of the customers you are trying to reach. This may be easy if you are part of the market, but the further you stray from that specific niche the more important it becomes to identify your audience. Conducting customer research will help you tailor your marketing and develop sales tactics based on reliable, accurate information.

Customer research provides in-depth information on the needs, wants, expectations and behaviors of the types of customers who are most likely to buy your product or service.

1.6 Six Questions for Buying Behavior

Let’s start with some basic questions that will help you focus in on potential customers. Select each question for details. When you have looked at all six questions, select Next to continue.

Find out who is buying your product or similar products. If you sell directly to individuals, identify gender, age, income, marital status and occupation. If you sell to other businesses, find out their size and kind of business.

What similar product or service sells the best? How does it compare to what you offer? Is demand higher during specific times of the week, month, or year?
Is your product something that requires higher cash outlay, or is it an inexpensive item? Do most consumers buy on credit or pay in cash?

What purpose will the product serve? Is it providing a service, a specialized function, or some other benefit? What does the customer get, tangible or otherwise, from buying the product?

Are sales of comparable products or services typically purchased through Internet sites or retail stores? Do customers expect delivery or home service?

1.7 How to Identify Customers and Their Needs

There are four basic ways you can identify your customers. Reviewing market research data, tracking customer experience, recognizing the customer’s range of choices, and identifying what drives your consumer’s buying decisions.

Let’s take a closer look at each of these options and see how you can make use of them.

1.8 Market Research Data

Where do you find most of the answers to your buying behavior questions? Through research. There are a number of resources available to you, many being free of charge. Here are six of the most common data sources that you can look into. Select each one for more information. When you have looked at all six, select Next to continue.

The U.S Government offers a wide range of online consumer data statistics that can help you identify customer spending traits and emerging trends. Some of the more useful websites are:

•     Consumer Credit Data
•     U.S. Bureau of Economic Analysis
•     Consumer Product-Related Statistics
•     Inflation and Consumer Statistics
•     Employment Statistics
•     Export Research

Select each link to visit the website.

Trade groups and associations often collect data from their members who which can provide valuable insight into your specific product or service. You can use an Internet search engine to locate trade groups and organizations relevant to your specific product or service.

Many specialized business trade magazines offer free subscriptions or allow free access to their websites. A quick search of the Internet will help you locate publications related to your product or service.

Many colleges and universities will have statistics relevant to your customer base. Business departments or experts in your product or service may have data available at little or no cost.

Customer surveys and focus groups are some of the oldest forms of gathering information on consumers, and the Internet has made them far easier than ever before. The SBA has specific information on surveys and focus groups available on the following web-page on their website: Improve Your Business With Customer Surveys. Select this link to visit their website.

As you look for sources of customer information, don’t forget the data you may already have available from your own records.
If you have a website, use tools to track how customers interact with it. Do they put a bunch of products in the cart and then leave when you ask them to sign before checking out? Do they all immediately go to the clearance section? Do most of them prefer to contact a sales representative?

Your own sales data and inventory data can provide a wealth of information, including locations, what the most popular products or services are, and buying habits.

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