Founder of BOOM & Partners, Kevin is a business and finance consultant, working with early stage businesses, from start up to mid-sized corporates. He is also a published author, international speaker, radio contributor and mentor at Cass Business School and the UK’s largest Entrepreneur Accelerator.
When your business was founded you would have done a lot of market research into all the areas necessary in order to validate your idea and to write a full and comprehensive business plan. The research is important as it ensures that your ideas for a business are more than just good ideas, but they can have real traction and that your initial ideas and that traction can be turned into a viable business.
Typically, the areas that need to be researched would include:
The whole business plan is really about your customers and the market place and ultimately all of that is woven around the most important factor of all – your customers. This is of course covered specifically in the second point above, but it is potentially the most important of all, as without customers you do not have a business.
Once your business has been established it is crucial that you keep revalidating your business plan and adapting your business model in light of any changed circumstances, and that also means a constant need to continually understand your customers.
The answer to this will depend on your company and your interaction with your customers. Initially the clearer your understanding of the demographics of your core customer base the easier it will be for you to refine and target your products or services and indeed any sales and marketing initiatives.
Ideally you want to be able to segment your customers into at least age groups and sex, but the greater detail you can understand the more useful it can be. Concerns over privacy and political correctness can make this complicated at times, but knowing that the majority of your clients are, for example, expectant mothers or young professionals will greatly influence decisions over new products as well as marketing strategies and spend.
If you can collect this information electronically at the point or time of sale then this makes both data collection and interpretation much easier. But if your business does not lend itself to that then it is possible to ask your customers to volunteer that information by way of customer surveys and the like, or even contacting or speaking with them directly.
Examples of data collection and how better to understand who your customers are, together with their shopping habits, are seen from the largest retailers and online stores such as Tesco and Amazon all the way down to local coffee shops.
As well as gathering information electronically or at point of sale there are of course many other tried and tested methods used by many of the biggest and most successful companies worldwide. These include focus groups in order to talk about existing or new products or services and indeed what the focus group would like to see in the future. Another option would be to phone or email your largest or most frequent customers directly in order to ask some standard questions such as what they like about your business and what they think that you could do better. Simple techniques such as emailing your client base a short, anonymous, customer satisfaction survey using something like Survey Monkey can also be extremely useful, but do keep it short if you expect many clients to respond.
We’ve established the importance of understanding customers’ demographics, spending habits and preferences – to name a few key traits. Once you have this information you can use it to the benefit of your business in many ways, including:
Put simply, the more you know about your customers the better informed each and every one of your decisions will be, and the better placed you are to make sure that your business adequately meets the needs and wants of your existing customers and attracts new customers.
Here are some suggested basic steps that you can take if you have not already done so:
✔ Prepare a good business plan and fully research your market
✔ Identify the ‘problem’ that your product(s) or service(s) solve and who they will appeal to
✔ Identify your customer as closely as possible. This can be done by using any or all of the following:
✔ Once you have this information use it to refine existing products and when you develop new ones
✔ Use the information to tightly focus your marketing message and delivery channels to ensure your sales and marketing budget is used as effectively as possible
✔ Ensure that you are constantly revalidating your business plan and business model as well as ensuring that you constantly strive to understanding your customers and their needs and wants
By using the information and acting on it in this way you obtain and continue to update important information about your customers you can help to ensure that your business grows and prospers.
Kevin R Smith
BOOM & Partners