Know Your Customers and Save On Advertising

Know Your Customer to Advertise With Precision:

Customers, clients, supporters, or patrons—whatever you call the people who purchase your goods and services, it's important to know them well. If you don't, be prepared to waste a lot of money placing ads in the wrong places, or worded in a way won't reach your audience. If you're a small business owner, you probably don't have money to waste. Thus, make it a small business commandment to Know Thy Customer.

The first step is not, however, to sketch your target customer on paper. First, figure out whether or not customers for your product or service actually exist. If you're a startup company or a small business with open doors already, you can determine your potential customer base a few ways:

• Do some basic market research.
• Host focus group sessions.
• Send out existing customer surveys.
• Personally interview potential or past clients.
• Give out trial samples or promotional offers to gauge interest and get feedback.

These methods will help you understand what actual or potential customers in your target market are thinking about what you offer. Try before you buy—which in your case means test the waters to see if there's an interest in what you offer before you invest a lot in it. Keep in mind, however, that not all customers know what they want until they actually try something. Take bottled water, for example: an idea that was laughed at once upon a time.

The Second Tip to Getting to Know Your Customers:

The second tip to getting to know your customers is establishing groups, such as primary and secondary customers. By identifying a few different types of customers, you prioritize them based on profitability, and decide how much money to spend on getting different customer groups through your door.

• Your primary customers are the ones you should spend the most time and money targeting. They're likely to directly respond to your products and services, and will spend the money to get them.

• Secondary customers are those who will buy a select type of product or service that you offer, but to a lesser extent than your primary customers will. Your secondary customer might be visiting small-town tourists who wants to associate themselves with high-priced designer fashion of the big city, but aren't likely to drop $1,200 on a pair of shoes, so you stock some $45 T-shirts or logo coffee mugs in a store kiosk that they'll grab up as souvenirs for themselves and their friends back home.

Next, understand the difference between your customer and the end user. In the previous example,  many of the women buying the lower-priced souvenirs are not buying for themselves, but buying gifts.  You'd be wrong to identify your customer as rural women who long for the big city; your customers are the ones who are actually there, in your city already.

• The customer is the one who actually purchases and pays for your product or service. Often, your customer may be a middleman, distributor, retailer, or gift-giver.

• The end user is the person or group of people who actually use, wear, or benefit from your product or service.

You must be careful to distinguish between your customer and the end user of your product or service. Being responsive to the details that are important to distributors, retailers, sales representatives, and others helps you plan your marketing effectively. You should first consider the needs of the people who are actually going to hand you money.

Once you've sorted out some basic information about your customers, it's time to get to the details. Try finding out the following about your customers:

• Geography (where are they located?)
• Income
• Age
• Gender
• Family/marital status
• Hobbies, interests
• Personality traits (How would they describe themselves?)
• Values (i.e. do they prefer organic? supporting local? charitable causes?)

Ultimately, once you've identified your customers, the most vital way you need to understand them is in terms of what they want or need. At the end of the day, you must fulfill a need of theirs that is not being met, or met sufficiently, by existing products or services.

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What's Next

Next In This Guide
Part 3:
Focusing on Your Message - How to create a message and make an impact on your customers.

Previous In This guide
Part 1:
Knowing Your Products - Discover small business strategies and marketing tips that will get results without costing a fortune.

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Street Smart Guide to Small Business Marketing

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