Marketing Starts With The Market
Marketing starts with knowing the people you want to serve. Before creating products, promotions, or strategies, successful entrepreneurs take time to understand their customers’ needs, preferences, and behaviors. When you begin with the market—not the idea—you build a business that truly connects and delivers value.
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Understanding Your Market: The Key to Smart Marketing
Effective marketing starts with truly understanding your market. Before you can promote your products or services, you need to know who your customers are, what drives their decisions, and which segments of the market are most valuable to your business. This means defining your market, estimating its size, learning your customers’ demographics, and identifying patterns in how they make purchasing choices. Without this research, your marketing efforts are like working in the dark—you won’t know which strategies or tactics will actually work. To make this easier, we approach market analysis as a structured process. By following a clear, seven-step process, you can uncover actionable insights that guide your marketing decisions with confidence.
These steps are:
Define your relevant market.
Estimate how big your market is (market size).
Understand buyer descriptors.
Examine how your customer buys.
Segment your overall market into groups of customers with similar needs and buying behaviors.
Prioritize who you are going to target.
Assess the competition.
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Set Clear Boundaries for Your Market
To focus your marketing and sales efforts, it’s important to define where the majority of your customers will come from—usually 90% or more. You may occasionally get customers outside these boundaries, but don’t let them distract you. By setting clear geographic or demographic limits, you can spend your time and resources on the customers who matter most.
For example, an entrepreneur in Oklahoma discovered he could take discarded Styrofoam, treat it with a fire retardant, and sell it as affordable home insulation. He defined his target market as building contractors with 20 or more employees in the major metro areas of Texas, Oklahoma, and Kansas who specialize in remodeling existing homes.
Similarly, a barber opening a new shop might focus on African American males aged 16 and older who live within three miles of the shop. By setting boundaries like these, you can focus on reaching the customers most likely to buy from you, making your marketing more effective and efficient.
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Knowing the size of your market helps you make smarter decisions about marketing, sales, and growth. There isn’t one “perfect” way to calculate it—you need a method that works with the data you can find. In communities with limited data, you may need to gather information from published sources, surveys, or ask knowledgeable people like suppliers, competitors, or local officials. The key is to make your assumptions logical, conservative, and believable.
There are two main approaches to estimating market size: Build-Up and Break-Down.
Build-Up Approach:
Start with a single customer or unit and multiply up to reach the total market.
Example: Wedding Photography in Orlando, Florida
Average wedding cost in Central Florida: $22,000 (a)
Portion of wedding budget for photography: 15% (b)
Portion of photography budget spent on video: 20% (c)
Number of weddings per year in Central Florida: 8,600 (d)
Formula:
Market Size = a × b × c × dCalculation:
$22,000 × 0.15 × 0.20 × 8,600 = $5,676,000This means the total market for wedding photography videos in Central Florida is about $5.7 million per year.
Breakdown Approach:
Start with a total population and narrow it down to your relevant customer segment.
Example: Retail Fashion Store in Indianapolis
You sell professional women’s clothing for big and tall sizes, targeting women aged 20–35.
U.S. population: 320 million (a)
Percentage that is female: 51% (b)
Percentage of females who wear big and tall sizes: 35% (c)
Percentage of females aged 20–35: 23% (d)
Percentage of U.S. population in Indianapolis metro: 0.6% (e)
Average number of professional suits owned: 3 (f)
Average cost per suit: $165 (g)
Formula:
Market Size = a × b × c × d × e × f × gCalculation:
320,000,000 × 0.51 × 0.35 × 0.23 × 0.006 × 3 × 165 = $39,018,672This means the total potential market for your store in Indianapolis is about $39 million per year.
Tips for Entrepreneurs:
Always base your assumptions on realistic numbers.
Use multiple sources whenever possible to check your estimates.
Decide whether a build-up or break-down method makes more sense for your business.
Even rough estimates are better than guessing—it helps guide pricing, marketing, and growth decisions.
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Understanding Your Customers: Who They Are and Who Makes the Buying Decisions
Before you launch or grow your business, it’s essential to know the market you’re serving. This means understanding two key things:
1. Who Your Customers Are
You need to define the characteristics of the people or businesses that make up your relevant market. Focus on traits that relate to what you are selling. Some examples to consider include:
Gender
Age groups
Income levels
Marital status, including single heads of households
Race or ethnicity
Education level
Employment status (full-time, part-time, unemployed, students)
Vehicle ownership
Homeownership versus renting
Use of public assistance
Current users of your product/service versus potential new users
Social media use
Knowing these details helps you tailor your product, service, marketing messages, and pricing to the people who are most likely to buy.
Click here to discover how your customers’ behavior can shift at every stage of the buying process.
2. Who Makes the Buying Decision
It’s important to understand that the person who actually uses your product may not be the one deciding to buy it. Some examples:
A parent might decide where their child buys clothes or gets a haircut, even though the child is the end user.
In households, one person may dominate certain purchase decisions while the other handles different types.
When selling to businesses, the decision-maker might be a business owner, director of operations, office manager, purchasing manager, or someone else entirely.
Talking directly to potential customers is the best way to understand who influences the purchase and what factors matter most to them. This insight helps you design offers, marketing, and sales approaches that reach the right decision-makers.
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Understanding How Your Customers Make Buying Decisions
Every product or service has a unique path that customers follow before making a purchase. People shop differently depending on what you sell—buying a dress is not the same as buying alcohol, a cooking stove, or a cell phone. Some decisions happen in seconds, while others take months or even years.
As an entrepreneur, it’s important to step into your customer’s shoes and understand how they make buying decisions. A simple model to guide this is:
Need Recognition – The customer realizes they have a need or problem.
Information Search – They look for options or solutions.
Alternative Evaluation – They compare different products, services, or providers.
Purchase Decision-making – They decide whether, what, and from whom to buy.
Post-purchase Evaluation – They assess satisfaction, which influences repeat purchases.
Not every step applies to every purchase. Sometimes customers skip the information search or there may be only one available option, leaving the decision to buy or not.
The key is to ask yourself:
How do my customers realize they have a need for my product or service?
Where do they look for information about options?
How many alternatives do they consider?
What factors influence which option they choose?
What makes them satisfied with their purchase and likely to come back?
How long does it take them to make the decision?
By mapping out the decision process for your specific product or service, you can better design your marketing, sales approach, and customer experience to meet customers where they are and guide them toward choosing your business.
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Understanding Market Segments: How to Break Your Customers Into Groups
Every market is made up of many different types of customers, and not all customers behave the same way. To better serve your clients and make smarter marketing and sales decisions, it’s important to break your customers into groups, or what we call market segments.
A market segment is a group of customers who share similar needs or buying behaviors for the product or service you are selling. For example, older married men may shop differently than younger single women when buying shoes, choosing a bank, or purchasing a laptop.
The best way to segment your market depends on what you are selling, where you are selling it, the resources you have, and any constraints you face as a business owner. For some products, segmenting by income levels might be most useful. For others, age, gender, or ethnicity may matter more. Often, the most effective approach uses more than one characteristic to define your market segments.
Discover why segmentation is crucial when choosing your ideal customers in this presentation.
Some segmentation examples are available in this PDF document.
By understanding and targeting specific market segments, you can tailor your marketing, pricing, and product offerings to meet the needs of each group, instead of trying to serve everyone the same way.
Click here to view some examples of market segments for:
a) companies making and selling bread products, and
b) companies selling financial services, both in South Africa
Here’s an example of a buyer behavior analysis for a business offering life coaching services.
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Focusing on the Right Customers: Choosing Your Target Market
If you are running a business with limited resources, you cannot serve every customer or every market segment. Each group of customers has its own needs, preferences, and expectations, which affect what you sell, how you reach them, the messages you use, and even the prices you can charge.
The key is to focus on the most attractive segments for your business. To do this, evaluate each segment using four simple questions:
Size: How many potential customers in this segment have the willingness and ability to buy your product or service? Is the segment big enough to be worth your effort?
Competition: How many competitors are already serving this segment, and how strong are they? Is it a crowded market?
Advantage: In which segment do you have the strongest advantage compared to competitors? Where can you stand out?
Ease of Marketing: How much time, money, and effort will it take to reach and engage this segment effectively?
Once you answer these questions, you can identify one or two segments to prioritize. These become your target market—the customers you will focus most of your time, energy, and marketing resources on for the next year or two. By concentrating on the right segments, you increase your chances of success while using your resources efficiently.
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Evaluating Your Competition: Know Who You’re Up Against
Once you know which market segments you will focus on, the next step is to assess your competition. A common mistake is assuming there is no competition because your product or service is different or better—but there is always competition. Even if no other business offers exactly what you do, you are still competing for your customers’ attention and their money.
A practical way to evaluate competition is to create a simple table listing both direct competitors (businesses offering similar products or services) and indirect competitors (businesses offering alternatives that satisfy the same customer need). For each competitor, note:
Key strengths: What they do really well.
Key weaknesses: Where they fall short or could improve.
You can gather this information by observing competitors, reviewing their marketing, and asking your customers what they think. This process helps you see opportunities to stand out and understand how to position your business effectively in the market.
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One of the biggest mistakes made by first time entrepreneurs is their tendency to see everyone as a potential customer. There are many people out there with different needs in a product area than you specialize in addressing. They have different priorities in spending their money. They have different preferences in what they buy, from whom, when, where, why and how. It is especially the “how” that matters. So, you can waste a lot of time and money (that you don’t have) trying to attract customers who are never going to buy from you, or who will not buy frequently enough, or spend enough money.
The key to entrepreneurial success is market segmentation and targeting. Market segmentation is breaking your overall market down into sub-groups of customers who have similar needs and buying behaviors. Targeting is deciding to focus on one or two of these market segments with your marketing efforts.
There are two principles that can be very helpful as you decide how to go after your customers. The first of these is the 80- 20 rule. It basically suggests that, if we look at all the potential customers in your defined market, 80 percent of the sales will come from 20 percent of the prospective customers. So, if you do not carefully segment and target your efforts, you could be spending a lot time reaching out to customers who are never going to buy. You want to focus on the 20 percent of the prospects—your target audience lies there.
The second principle is the shotgun-rifle concept. When you do your marketing, are you doing it a broad, that seeks to reach anyone and everyone (including the 80 percent who are not going to buy)? That’s a shotgun approach. It’s like firing a shotgun and spraying shot all over the place. You might be reaching the people who actually might buy from you, but you are reaching a bunch of other people as well. The shotgun approach is wasting your time and money. Instead, you want to approach the market and your marketing effort with a rifle approach. When you fire a rifle, it makes a clean hole in the target. So, you are not marketing to anyone and everyone, but only to an intended target audience.
Here is an example. An entrepreneur had a takeaway shop that sold jerk chicken. He was located in a declining neighborhood in the inner city where there was a lot of crime and other social problems. He believes that anybody and everybody in the metropolitan area could be a potential customer. As a result, he is thinking about paying for some advertisements in the local newspaper. This would be a shotgun approach, as he is paying to reach a lot of people (newspaper readers) who are never going to visit his store. It would be tremendously wasteful with resources and not especially effective in communicating with the right audience. Let’s assume he decides to segment and target the market. He realizes his key target audiences includes a younger demographic (14-20 years of age) who live in neighborhoods closer to his location, and working class people with jobs nearby. Instead of pursuing the newspaper advertising, he instead places ads in the church bulletins of five churches located in the inner city. This would represent more of a rifle approach.
Segmentation and targeting are about efficiency and effectiveness. Efficiency means getting more out of your limited resources—reaching the right people and not wasting resources on people who are very unlikely to buy from you. Effectiveness means using your resources in ways that have the maximum impact on the people you are trying to reach—you get the most response in terms of them actually buying from you.
Here is a simple process for segmenting your market and then targeting your marketing efforts:
1. Define the relevant market for your business. Establish boundaries or parameters, such as the geographic area in which the large majority of your customers will come from.
2. Identify types of customer descriptors that could be used to break the market down into subgroups of customers. These would be variables that might have implications for their needs and buying behaviors toward the product or service you are selling (e.g., demographic age, gender, income, race, geographic, psychographic, usage rates). They will be different depending on what you are selling.
3. Apply these variables to identify particular clusters or sub-groups of customers that have fairly similar needs and/ or buying behaviors towards your product or service. So, these sub-groups would be fairly homogeneous when it comes to buying your product or service.
4. Evaluate the resulting segments based on a set of criteria such as:
- how large is the segment in terms of numbers of potential customers in the local market?
- how well-served or satisfied are they with competing firms (might we have an advantage with any of them)?
- the extent to which they are actionable (there are unique things you could do with your marketing or product offering that would especially appeal to these types of customers).
5. Select the segments that do best based on these criteria.
6. Decide on one (or two) of these segments that should be the priority for your business over the next 12 months. This is called targeting.
7. Come up with marketing ideas and approaches that would especially reach and appeal to the chosen segment(s).
7. Come up with marketing ideas and approaches that would especially reach and appeal to the chosen segment(s).
Another useful tool is called a segmentation tree. This is where you segment the market using a series of different variables to arrive at your target market. It is a tiered approach. Below is an example of a segmentation tree (you would change the segmentation variables to fit the product and market you are dealing with). This example is segmentation for an entrepreneur who was producing wooden birdhouses that people or organizations would buy for outside their homes or buildings/facilities. The segmentation analysis led the entrepreneur to first decide to focus on the B-to-C market, then on females, principally stay at home parents and retirees, who were college graduates and owned a home, have a yard and enjoy gardening. Click here to see a visual representation of a segmentation tree.
Finally, keep in mind that segmenting and targeting allows you to tailor your marketing message and marketing approach to the specific nature and needs of a particular type of customer. Consider the entrepreneur with a microblading business, where she helped shape, fill and color people’s eyebrows. Rather than just blindly market to everyone, she identified three key market segments that she believed represented her “sweet spot” in the market. These included: younger girls aged 16- 21; professional working women between 35-50 years old; and women who were going through cancer treatments. Each of these segments has different needs, different price sensitivities and buys the service in different ways. As a result, our entrepreneur tailored her marketing efforts in different ways to each of the targeted segments.
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In STEP 19, you determined your priority target audience. Since then you have hopefully made sales, taken on new customers, and have a good set of data to draw from. It is time to head back to that data and refine your customers into segments. Refining your client segmentation means identifying and categorizing your customer base into groups and then tailoring your marketing efforts to reach and engage those groups. It is about prioritizing targeted segments where you will make most of your money. Patterns and sales should help you to distinguish sub-groups (or segments) of customers based on what the data is telling you—who is a recent user, who is not, etc. Segmentation will allow you to categorize your audiences and make the most of your marketing efforts.
You should begin improved segmentation and targeting by examining sales data as well as any customer/client feedback, social media and any other data source that may be helpful. Once you have all your information gathered, identify key customer characteristics as well as the similarities and differences between customers. Based on your analysis, identify the key characteristics that differentiate your customers. This may include age, gender, location, income level, job title, industry, interests, lifestyle, and buying behavior. Consider both demographic and psychographic factors.
Next, you will want to create categories into which you can put your customers. One of these categories could be “middle class woman between the ages of 45 and 60” or “20-28 year old men who work blue collar jobs”. Whatever this looks like, be sure to give each segment a name or label that represents its defining characteristics. Develop detailed descriptions for each segment, outlining their shared traits, needs, preferences, and motivations. This will help you understand and communicate with each segment effectively.
In the example above, the entrepreneur has identified four categories (or segments) of customers for his financial services business. Here, he finds the most useful way to segment is based on where people are in their careers, as this reflects their income levels and their needs when it comes to investing. Here, the segments have been given names by the entrepreneur (e.g., prime professionals) as that seems to best describe their set of characteristics. The variables that capture these characteristics here (e.g., how much they can invest, their time horizon for investing, how risk averse they are, and so forth, are quite detailed in this example. For you, it may simply be things like their gender, age, income category, and their product preferences. The more insight you can develop about the customers, the better.
Here is another example, where the entrepreneur has started a small bread company. In this case, the entrepreneur has identified four segments based on their distinct needs and buying behaviors when it comes to bread products. For each segment, she has identified their income category and household size, what they most look for in a bread product, how often they tend to shop for bread, and where they prefer to buy their bread. So, the value seekers tend to be budgetconscious families who want a wholesome product but are more price sensitive.
Here is another example of different segments.
In these two examples, the descriptive name given to the segment is simply capturing the essence of the segment. These names should reflect the key characteristics identified in the previous step: age, background, challenges, preferences, locations, etc. While this is not necessary, it can be a good way to organize and also remember your client segments. Once these are created, it is important review and refine as your customer segments may change.
Now that you have customer segments, you will be better able to target each group. To target these groups, consider the following.
1. Prioritize segments: Assess the potential value and attractiveness of each customer segment based on factors such as size, growth potential, profitability, and alignment with your business goals. Prioritize segments that you will concentrate more heavily on for the next 12 months or so. These should be the segments that offer the greatest opportunities for success, and so they are the ones you should allocate your limited resources to.
2. Identify ways to tailor your marketing: Develop tailored marketing messages and communication strategies for each segment and speak directly to the uniqueness of each segment. Use language, imagery, and channels that resonate with each segment. You may also offer specials for the products or services most desired by the segments you are targeting.
3. Implement targeted marketing campaigns: Create marketing campaigns that specifically target your priority segments. Utilize channels such as email marketing, social media, paid advertising, as well as guerrilla marketing tactics. When creating targeted marketing campaigns, put yourself in the shoes of someone in the segment you are targeting. Think and act as though you are a part of that segment and create campaigns accordingly.
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Establishing a loyalty program for returning customers can be an effective strategy to encourage repeat business and foster customer loyalty. Higher spending shows up in two ways: coming more often, and spending more each visit. Loyal customers are also more likely to pass along good word of mouth about your business.
Consider an entrepreneur who is opening a hair salon. The best way to get customers in the door when just starting out is recommendations. Offering a loyalty program for referrals can be a great place to start. For every referral made, a customer receives a free conditioning treatment, eyebrow wax, or 20% off a coloring service. This can get people in your door, but your job is to keep them.
Consider the same hair salon, but a year after opening. The salon now has a healthy amount of customers coming in, but needs to work on creating return customers. A punch card is a great way to get customers continuing to come. A customer gets a punch in their card every time they receive a service from the salon. After 15 punches, the customer gets to pick out a product of their choice that is less than or equal to $50. As long as you are able to provide a quality service each time, this is a great way to get customers to come back.
Now that you have two examples of loyalty program, here are some steps to help you get started in creating your own:
First, you will want to determine the specific goals of your loyalty program. Are you aiming to increase customer retention, encourage higher spending, get customers to come more frequently, incentivize customers to provide data about themselves or provide feedback, or get them to refer others and pass along good word of mouth about the business? Are you looking for customers to bring a friend? Do you want one-time buyers to become repeat customers? Do you want customers to try a new product or service? For customers to participate in events or new services? Clearly define what you want to achieve with your program and tailor it to meet the need.
There are a number of different approaches to the design of loyalty programs. Here are six examples:
a. Points-based: Customers earn points each time they make a purchase. Once they reach a certain number of points, they can redeem the points for a reward. The reward could be a free product or service, or 50% off on a product or service, cash back rewards, or some other incentive.
b. Tiered approaches: Customers are placed into categories (e.g., platinum, gold, and silver) based on how much they have purchased from you over the preceding twelve months. Depending on what category they are in, they receive certain benefits or perks, such as free delivery, reduced waiting time, service without an appointment, tailored recommendations, or an automatic 10% off each purchase. The higher the tier, the more benefits the customer receives.
c. Membership-based: Customers pay an annual or monthly fee to be part of a VIP category. As members of your VIP Club, they are eligible for a range of exclusive benefits—where these benefits would depend on the kind of business you have. Examples might include preference in scheduling appointments, private access times at your facility, early awareness of new products and product specials, birthday bonuses, or customized offerings of products or services.
d. Spending-based: This is a variation on points-based system. Here, customers are rewarded based on how much they spend, as opposed to how they make a purchase.
e. Cause- or donation-based: This is an approach where the entrepreneur identifies a cause the customer cares about, and every time they spend money at the business, the entrepreneur donates a certain percent of the purchase to a social cause (e.g., breast cancer awareness, the homeless, clean-up of a river, prevention of animal cruelty).
f. Partner-based: This is a form of co-marketing, where your loyalty program works in tandem with the loyalty program of another business. These would usually be businesses that sell products or services that are complementary to what you sell. An example would be an airline that collaborates with a hotel chain. One approach would find customers who gain loyalty points at one business get an equal number of points at the partner business, or alternatively, can use the points from the first business at the second business.
You can get creative in terms of which these to use, what kinds of benefits or rewards you provide to customers, as well as how the program is administered. Select the program type that aligns best with your business model and appeals to your customers. For some businesses, a points-based system collected through smart phone might be the most effective. For other businesses, like a coffee shop, a punch card might make the most sense. For example, you could offer points based on purchase amount or frequency, or provide incentives for specific actions like referrals or social media engagement. Make sure the guidelines are simple and clear. Whichever you choose, make sure you can hold onto it for a while.
A loyalty is useless without valued, redeemable rewards. Create rewards that motivate customers to participate in the loyalty program, ones that are valuable, relevant, and achievable. They could include discounts, exclusive offers, freebies, early access to new products, or personalized experiences.
Once you have a loyalty program, develop a marketing and communications plan to promote it. Clearly explain the benefits, rewards, and how customers can participate. Use various channels such as email marketing, social media, website banners, and in-store signage, and engagement to spread the word. Educate your employees about the loyalty program so they can explain it to customers and also address any inquiries.
See where this loyalty program takes your business. Experiment with it for 3-4 months. Track how much customers are taking advantage of it, and whether these tend to be certain kinds of customers (based on age, gender or other descriptors). Make adjustments until you start to see real benefits.
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Entrepreneurship is a learning journey. The most successful entrepreneurs are the ones who learn the most along the way. They are always getting better. One of the most valuable sources of learning is customers. By the time you get to this step, you have launched the business and generated sales. What are they telling you with their behavior and buying patterns?
Here are six key things you might concentrate on learning as the weeks and months go by:
• Who are you attracting?
• What do my repeat or more loyal customers look like?
• Who are you not attracting?
• How do customers buy?
• How are you attracting the customers you are serving?
• What patterns can you see in terms of who buys what and when?
• What are the most prevalent complaints or areas of customer dissatisfaction.
Who are you attracting?
What types of customers are you drawing to the business? Consider their demographics: age ranges, racial composition, income categories, gender mix, and whether they are professionals, working class, students, retirees. Do they come from your immediate neighborhood or network, and from how far away? Does your customer base look the way you expected it to look when you started out? What are the differences? Which types of customers did you not expect? Why do you think you attracted them? If you are drawing a segment different than originally planned, it is an opportunity to pivot your marketing strategy, or delve deeper into this unexpected market segment.
Tracking the characteristics of your customers requires that you build a customer database (see STEP 61). Record information when you can and add to it as you learn more about a customer. Some information (like name, email address, physical address) can come from invoices you fill out. Some of it can come from records of credit card purchases. You might keep a chart near the cash register where you record information on customers when they purchase from you. Doing occasional customer surveys can help. Entrepreneurs sometimes give customers an incentive or discount if they answer a few questions. If people order online from you, you can have them provide key information when they make a purchase.
What do my repeat or more loyal customers look like?
Developing a demographic picture of your customers is helpful, especially if you can determine which types of customers tend to spend more and buy more often from you. As you develop your customer base, it is useful to divide them into at least three groups:
loyal buyers – customers that purchase regularly from you, spend more on your business, make an effort to be loyal, provide helpful feedback to you, and spread good word of mouth about your business to others;
repeat buyers – customers who buy from you periodically, but also buy from other providers, and are less loyal. They may buy from you because it is convenient, or cheaper, but make no special effort. They are less likely to encourage others to buy from you;
one-time or very occasional buyers – these customers buy once and you probably won’t see them again—or at least very rarely; they have no real connection to your business.
By understanding who these three categories of customers are, the entrepreneur learns to invest more effort in the best customers. He or she approaches these customers as a relationship, where the one-time customers are approached more as a transaction. All customers must be treated well, but the entrepreneur goes the extra mile with loyal customers. The entrepreneur comes to know these customers better, including their needs and preferences, and even when their birthday is. These customers may get more customization of products or services, faster service, special orders, price deals, free items, or other incentives.
Who are you not attracting?
The better you understand who is buying from you, the more you can start to identify the kinds of people you are not attracting (but wish you were). Are you getting fewer younger customers, higher income customers, people of color, married people, professionals or white collar workers, students, people from more than mile away, or having some other characteristic? Why do you think this is? Is there something you could change or add? Are you marketing to these people?
How do customers buy?
When people purchase things, they go through a process before and after making a buying decision. You should study how your customers buy? This is a simple example of a customer buying process.
While not all of these steps are involved in every purchase, you want to get a feel for what people do when they end up buying (or not buying) from you. It is about walking in their shoes. By understanding what triggers the customer’s need recognition, or where they look for information about products like yours, what attributes they most consider when buying a product like yours, and related questions, you can tailor your marketing and business operations to reflect what the customer is thinking and doing. For instance, what triggers the need for a new dress, or to go to an ice cream store (or whatever kind of business you have)? How important is price versus quality versus selection versus some other attribute when people select skin care products? The answers can translate into decisions about what products you carry or services you offer, what you promote or put on sale, your marketing messages, and even things like your operating hours.
How are you attracting the customers you are serving?
If you are not regularly asking how your clients heard about you, now is a good time to start. Is a large portion of your business coming from client referrals? Consider developing a formal referral program. Is it from social media? Consider putting a few dollars towards targeted social media ads. At this stage, if you are trying to reach families in the neighborhood, perhaps inexpensive advertisement in church bulletins or sponsorship of a local baseball team might be effective. How many are random walk-ins? Maybe you should have a sandwich board promoting some special on the sidewalk in front of your business. Marketing choices will differ based on the answers you receive. For more ideas, refer back to STEP 51 on guerrilla marketing tactics.
What patterns can you see in terms of who buys what and when?
Different types of customers will tend to buy more of certain products or services. If you have a dress shop, are there customers who are more likely to buy an accessory when they buy a dress? If you run a daycare business, are single moms more likely to use your after-care services? If you have a cleaning company, which customers more frequently ask about your window washing service?
Patterns can also be identified in terms of when certain kinds of customers tend to frequent your business. Your weekend traffic might look very different than your weekday traffic. Customers who buy from you later in the day might differ from those who buy earlier. Some clients might use your products or services more in particular months or at particular times of the year.
Again, this sort of knowledge can lead to much more creative and effective marketing tactics. For instance, knowing who is more likely to buy the accessories or use a particular service tells you who you might more heavily promote or offer incentives to. Knowing what kinds of customers purchase on weekdays allows you to tailor or prioritize things to reflect their needs and preferences during those times.
What are the most prevalent complaints or areas of customer dissatisfaction?
No one likes complaints, but you should not discourage them, hide from them, ignore them, or be defensive and get angry about them. Complaints and feedback can hurt, but they are feedback that can help you improve the business and make more money. Treat them accordingly. Track them over time. See which ones show up the most frequently. Determine which ones come from your better customers. Be responsive—customers want to know what you will do to ensure the problem does not recur. Refer back to STEP 65 on setting up a system to get customer feedback.