At a recent dinner with a group of entrepreneurs, one asked how she could re-energize her business. The recession, along with changes in technology, has taken the steam out of her successful 20-year growth curve. The group was highly supportive and provided great ideas and insights. Later that night, it occurred to me that to expand a customer base, small companies should think like big companies. After all, big companies were once small, were they not? Even if small companies don’t have the resources of big guys, they have plenty of ingenuity!
Big, growing companies know their markets very well through market research and carefully culled data. Market research is conducted to learn more about their customers and their prospects (future customers) by research firms and product managers. And, in today’s world, their analysis includes “Big Data,” like a search through the more than 340 million tweets a day to find out how their markets think and feel. Because the markets and their attitudes and interests change over time, big companies keep up the market research and the data collection and modify their approach regularly. They never stop!
Next, they use what they know to appeal to their markets effectively. Does their market use twitter? Then they tweet. Are they single? They advertise on Match.com. Their market likes golf? They sponsor golf tournaments. The market is mostly female? Their campaign speaks particularly well to women. Their potential customers ride buses? They advertise at bus stops. The market is suburban families with 2.3 children, a minivan and a dog? They partner-market with pet shops, mini-van dealers and children’s products. Their market is corporate executives who have been to top universities? They hire sales people who attended those same universities. Their market is large companies which are highly selective about services used? They help their employees find jobs inside those companies in order to have an ally on the inside.
OK, so you’re saying to yourself that you have a small business and don’t have the resources to gain that level of knowledge about your market. I understand. When I used to work in a large company, I had resources like an administrative assistant and an IT department. Now that I have a small business, I am both, and not great at either! I don’t have enough resources to hire people to handle those functions for the business as yet, but I manage to do those functions in the meantime.
Despite your limited resources, you can still know a great deal about your target markets. How? Research. Let’s start with your existing and prior customers. Create a spreadsheet, database, a word processing table, or a table on a pad of paper and list their names. Now, list their contact information, including email addresses, phone numbers, and snail mail addresses. You could be using all three of these to contact them in the future, so make sure you have them.
Now, create columns for relevant characteristics. Are they male or female? Are they high school graduates, college graduates, or holders of advanced degrees? Where did they go to school? Are old are they? What neighborhoods or zip codes do they work and/or live in? Are they CEOs, executives, managers, or administrative employees? Do they like sailing, running, tennis or football? Are they active in networking groups, and if so, which ones? Do they participate in events, and if so, which ones? Do they have kids? Pets? Fancy cars? Hybrid cars? Bicycles? Designer clothes? Backpacks? Summer homes? Trailers?
As you can see, this list of characteristics, preferences and demographics can go on and on. The key is to figure out which ones are relevant and prevalent among your customers and former customers. And don’t forget to add, why did they buy from your company in the first place? How did you make them a customer? Did they see your shop from the street while driving by or did they see a coupon in a magazine? Did they meet you personally or did a sales person make the connection? Or, did a good customer refer them?
What you don’t know about your customers can hurt your business. If your chart looks blank, it may be time to do some research. Contact customers and former customers and find out the answers. You don’t have to contact all of them to learn who your customer/market is. Pick out 20 who are representative. Meet them for coffee or lunch, or meet in their office, preferably face to face, and ask them questions relevant to your target market. Find out how they found you in the first place. If they are former customers, find out why they don’t buy from you now. The key is to listen well. Let them talk. You want the truth, not feedback that makes you feel good.
Once you know more about your customers, you are ready to build a profile of your future prospects and figure out how best to reach them. The next step is to build a database of future customers. Big companies do that, too!
All the best,