Ask any small business owner if they’d like more customers and in virtually every instance, the answer would be a resounding ‘Yes please’. However, is ‘more’ actually better? In this article, we’ll examine whether your business would be better-off improving the quality of your customers rather than just the quantity.
Why Targeting the Ideal Customer is Important
As a small business owner, your time is a valuable, limited resource – there are only so many hours in a week that you can give to your customers. With this in mind, wouldn’t it be better to firstly target customers that are more likely to buy from you and secondly, customers who aren’t going to hog your valuable time?
To coin an old cliché, ‘time is money’ so in the quest for more customers it’s worth considering a few questions before you go charging ahead with your next marketing campaign.
Identifying the Perfect Customer
At this point, it’s worth going back through your order book and examining who you considered to be your better customers. And by ‘better’ it’s not just a case of which customer has spent the most money. A customer who provides 10% of your turnover but takes-up 25% of your time is not an ideal customer.
To identify the ideal customer, there are a number of simple questions you could ask regarding your previous customers.
- How much have they spent with your business per sale?
- Was the sale relatively straightforward?
- Did the customer require a lot of after-sale care?
- Have they, or are they likely to buy from you again?
- Would they recommend your business to others?
A good idea would be to mark the customer on a scale of 10 (1 = very negative, 10 = very positive) for each of the above factors so you have an overall maximum score of 50. Now disregard any customer who scored less than 40 and you should have a list of customers who have proven to be ideal.
Knowing which of your previous customers were ideal is the key to understanding which future customers will be ideal. To do this, you need to go through your list and look for any pattern that might identity a particular characteristic of your ideal customer – this is a process often employed by larger organisations and given the rather grandiose label of ‘demographic profiling’. Some (not always obvious) characteristics might be:
- Age group – could you narrow-down your ideal customer to a specific age group?
- Gender – have your ideal customers been primarily male or female?
- Location – Is there a particular part of town, the county or the country your best customers hailed from?
- Business or Consumer – Have your ideal customers been businesses or consumers?
- Social Class – Do your ideal customers tend to be in a particular social group such as ‘Blue Collar’ workers or Professionals?
There are doubtless many other common characteristics that you could identify across your range of previous customers that might prove useful but if you start with the five above, you’ll be able to get a clearer picture on which groups your ideal customer occupies.
Hunting in the Right Jungle
This is the part of the research that should really give you that ‘light-bulb’ moment. Knowing the characteristics of your ideal customer will help you identify and laser-target your marketing methods.
Laser-targeting your ideal customer has two huge advantages over simply using a ‘scatter gun’ approach to your marketing:
1. You can tailor your marketing message specifically towards your ideal customers.
2. You can promote your products or services in places where your ideal customers are most likely to be receptive.
By focusing some of your marketing towards that particular group, you should get higher conversion rates and customers who are less likely to be ‘high maintenance’.
To help you identify the best marketing methods to target your perfect audience, some of the following questions are worth asking yourself:
Is this group more receptive to digital or traditional marketing, for example email or direct mail?
If your ideal customer is in the age group of 60-70 years of age, direct mail would generally be far more effective than sending email. Equally, would advertising on Facebook be more effective than sending letters to a target market of men in the 18-25 age groups?
Is there a particular magazine, newspaper (local or national) or trade journal aimed at this particular group?
If you sell your products primarily to Women in the age group 50-60, would an advert in “Peoples Friend Magazine” reach them? If you’re advertising locally, would placing your advert in a specific part of the paper be more likely to attract your target audience?
Would a specific ‘offer’ on your website be more appealing to this group?
The use of vouchers or discounts aimed at a specific product or service might help to attract more of your ideal customer group. For example, a Plumbing Company might offer a 15% discount on boiler servicing for Pensioners if their ideal customers are in the age group of 60-70.
Which other websites or businesses would this group be likely to buy from or use?
If you are selling Organic Babywear and your target market is women aged 20-30, you could do a Google search for ‘First Time Mums Advice’ and take a look at the websites on the first page. Is there an opportunity for buying a banner ad on any of these websites? Is there a forum you could join to (subtly) discuss your products?
Familiarity Breeds Success
Whilst trying to group your customers into ‘little boxes’ is without doubt crucial to your future marketing efforts, there is no substitute for actually talking to your customers. People are complex so no matter how much analysis of demographic data is undertaken, you can really only understand the individual by engaging with them. If you really want to know what makes your customers tick, pick up the phone and talk to them. Only by truly standing in the shoes of our customers can we provide them with what they want or need.
If you’d like any advice with your online marketing and how we can help you identify, find and target your perfect customers, give us a call on 01252 416 222 or use the call-back request form on the right of this page.