Customers. They are the lifeblood of any business. They supply your income and they usually play a big part in helping you get new customers.
But what do you know about them? And why does it matter?
“Build it and they will come” may have worked for Kevin Costner in Field of Dreams, but for your business, it’s a good way to go broke. The vast majority of businesses have plenty of competition for their customers’ business. To win that competition, you need to know your customer better than they know themselves.
Here are seven things all business owner need to understand about their customers.
Who are they?
Knowing who your customers are means being able to describe basic facts about them. This is one of the most basic things you can know.
How old are they?
Where do they live?
How much do they earn?
Do they tend to be male or female?
Any particular ethnic or racial background?
Being able to answer these questions and others about your customer tells you quite a bit about them.
It helps you find them in a crowd. It helps you make decisions about how and where you advertise and how you deliver your product.
For example, lets assume your market is working parents. You might want to offer evening and weekend hours, or home delivery, or have a place for the kids to play while you do business with mom and dad.
Where are they?
This question can help you in a few different ways. The “where” can be where they live or work. This helps you decide on locations, delivery routes, and where (physically) to advertise.
Where can also refer to where they are when they need your product or service.
Finally, where can refer to places they hang out, either online or offline.
Knowing the answers tells you where you need to be so you’re there at the moment they realize they need it.
What problem are they trying to solve?
No one buys a drill. They buy the ability to make a hole in something.
What problem does buying your product or service solve for customers?
Once you understand this, you’ll have a much better understanding of how to talk about it. You want to talk to potential customers in a way that feels like you are helping them solve a problem, not selling to them. This approach will lead to more sales and happier customers.
What matters to them?
There are a lot of things about your product or service customers could care about. Some will be more important that others.
Different groups of customers will care about different things.
Some of the more common things that matter to customers include:
- Price
- Quality
- Convenience
- How well it works with other things they own or do
- Social acceptance – how many others also use it
- How using it makes them feel about themselves
- How using it makes them look to others
The first four items are about the product or service itself. They are mostly objective facts. The remaining three are about the effect owning or using your product has on them. These are subjective, emotional items.
Both matter.
You need to understand which are most important to your customers.
Knowing the answer to this question is what lets you talk about the product in a way that shows customers it is the exact solution they are looking for.
For example, let’s say you are selling an exclusive luxury item. You’ll want to talk about how owning it makes the customer feel successful and important. You might also want to talk about how it makes others see them as special.
If you are selling an everyday commodity like table salt, you’ll need a different approach. You’ll want to emphasize that your salt is lower cost and/or more convenient compared to other sellers of table salt.
How do they make decisions?
Are your customers impulse buyers? Or do they do exhaustive research into features before deciding? Or do they buy from the salesperson they like the best?
Your sales process needs to match the customers’ buying process. If your customer likes to do research, make sure you have the data she’s looking for. For example, you’ll want to provide things like:
- product specs
- reviews
- references
- information about durability
- anything else that demonstrates your product will deliver on its promises.
If your customer is more concerned with buying from people they trust, then you need to build relationships with prospects.
How does your business make their life better?
If you know the answer to this question, you know how your product benefits the customer. Just how the customer’s life is better can take several forms.
It could be that using the product makes some aspect of their life easier. Or it could be that they get some emotional benefit from the product. It could even be that their life is better because of the experience of buying it from you.
For an example of the experience, let’s compare two hair salons. Both do a perfectly good job at cutting hair.
The first salon has a sterile businesslike environment that leaves the customer feeling like they were on some sort of assembly line. There isn’t much interaction with the stylist. It’s all about getting the customer in and out as efficiently as possible.
At the second salon, the stylist knows the customer’s name and remember details about their life. There are comfortable couches to sit on while waiting and a great selection of drinks and snacks. At this salon, the customer feels like they are visiting friends and looks forward to getting a haircut.
See how those two experiences of the same “product” will attract different customers?
Why do they choose you?
You probably made many assumptions to answer the first six questions. This is the question where you test those assumptions.
Ask your customer why they bought from you. Use their answers to refine your understanding of how people view your business.
This doesn’t have to be a complicated process. It can be as simple as asking the question and writing down the answer.
Of course, you could do things like customer surveys or formal interviews. These have their place, but aren’t necessary to get to the basic answer of why customers chose you.
What matters is that you ask the question with genuine curiosity and listen to the answer. And then you use the answers to refine who your target customer is and how you talk to them.