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The Customer Is King

 

The Customer Is King
 

It goes without saying that without customers you’re not in business. Yet it’s surprising how many people set up in business without a clear idea of who their customers are or fail to appreciate it when their customer’s needs have changed and they’re likely to move on to another supplier.
 
The more you know about your customer the more likely you are to be successful in your overall marketing strategy. Being successful in marketing means that you not only increase your revenue but you spend less money to make more because you are marketing to precisely the right group.
 
So Where Do I Begin?
 
To sell effectively you need the keenest possible insight into who your customers are and why they buy. What need are they satisfying? What specifically motivates them to buy? Is it:
 
Lifestyle or Status:This includes aspirational purchases or ones that make a particular statement about the buyer e.g. fair-trade clothing, luxury goods, branded items etc.
Basic needs: This category includes petrol, food, lighting, heating, some clothing, some toiletries etc.
Desire: This is quite distinct from need and will include luxury toiletries, cosmetics, luxury clothingetc. This category might include impulse purchases.
Leisure and Entertainment: Includes theatre, films, CD’s, DVD’s, tickets for leisure activities etc.
 
Clearly some customers might buy the same item for more than one of these reasons!
 
Standard Market Categorisations
 
 
Customers are routinely categorised by means of social class, income, education and occupation. A fairly standard categorisation is the one used by the advertising agencies’ professional body:
 
AB: Managerial and professional
C1: Supervisory and clerical
C2: Skilled manual
DE: Unskilled manual and unemployed
 
These are crude categories inasmuch as families with the same income might have very different values and lifestyles. A teacher may earn the same as a plumber but spend the money on very different things. In a practise often referred to as ‘Affinity Profiling you analyse the customers’ buying habits to better match the precise product to the customer. For example, a man who buys lots of tools would possibly be interested in items like protective workwear, safety equipment and work boots.

So, to summarise, a full profile of the customer’s lifestyle is necessary to underpin any effective marketing strategy. So how do you build up that profile?
 
Using Market Research
 
Effective market research can help you to design new product offerings and improve on existing ones. Research can help you determine who and where your customers are, how much they spend, what might motivate them to spend more, what they think of your product(s), what improvements they’d like to see, how they react to your company image/staff and how you compare to your competitors. Yes it can be time-consuming and sometimes expensive but good research can help your company avoid costly or potentially disastrous mistakes.   Banks will usually expect to see this kind of data in considerable detail before they would consider lending.
 
Primary vs. Secondary Data
 
 
 There are broadly two types of research - primary and secondary. Secondary is generally cheap and easily available.   It includes published research carried out by government and private companies; trade journals; information available on the internet. Although secondary data can be too general and is often out of date it can nonetheless be very useful. Try your local library or - better still - a commercial library if your town or city has one.
 
Primary data is newly collected information that you generally have to either gather yourself or pay someone else to collect. The upside is that you can tailor the information to your exact needs. There are a number of ways you can gather primary data. This includes:
 
Observing people: You can watch the behaviour of people in buying situations, assess traffic patterns in areas where you might site your premises, analyse peak times of buying etc. You can also show people your products or proposed advertising and promotional material and observe their reactions.
 
Conducting a Survey: This can include focus groups, web-based surveys, postal questionnaires, telephone questionnaires, personal interviews etc. 
 
To collect the highest quality information it’s important to be clear about precisely what it is you’re trying to measure, what data you’re looking to collect.
 
Top Tips for Questionnaire Design:
  • Never ask leading questions that will bias the answers
  • Be aware that people may exaggerate (e.g. income, status etc.) or may tell the interviewer what they think s/he wants to hear
  • Make sure you offer all possible answers to the questions i.e. don't exclude relevant data
  • Don't put important questions near the end of a questionnaire.  Interviewees can get jaded!
  • Leave personal questions to the end - age, income, marital status etc.  Interviewees may feel threatened by these and wonder why they're required.
  • Save difficult/potentially threatening questions (e.g. about race, gender, religion etc.) to the middle or end once some trust has been built up. 
  • Give questions that make it easy to analyse/quantify data.

 Have Your Say

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