Know Your Customer
Business experts have multiple terms for identifying the person or object most likely to be your customer. Some call it the ideal customer. Consultants call it your product or brand champion. Others divide your customer base into different segments like primary and secondary customers, creating overly complex definitions and methods for categorization. You are a busy entrepreneur with many more projects to complete than you have hours in a day. Struggling to memorize or organize one more list is not likely helpful to you.
There is great debate among self labeled business guru types and Academics over what and who might be a customer. Some argue that customers might not be only humans but possible animals, organizations, etc. My response to that would be who cares! There are far more simple ways to identify and to deeply understand who or what is consuming your product or service. Business practitioners avoid the academic debates and put these simple methods to work ever day. They often are not deliberately using such classic methods but the result is the same.
An Old Principle
One of the most effective and simple methods to know your customer is to practice the 80/20 rule. This is an old pearl of wisdom which says 80% of your revenue comes from the top 20% of your customer base. That means if you have 100 customers, 20 of those customers are providing 80% of the revenue for your business. Let us call this group of customers your Top 20. This customer list is your most valuable asset for marketing. They typically buy items at full price. They rarely return items or complain. Most importantly, this group is one of your best marketing tools for word of mouth marketing. Your Top 20 customer base will be your brand advocates, those who scream from the rooftops how great you are and how awesome your products are.
Clone Your Best
If you want to grow your business then clone your Top 20. Your task is to deeply understand the lives of these customers.
Create a service or shopping experience build around their favorite things. Do this right and your Top 20 customer list will become your best marketing too. Loyal and happy customers love to brag and share. They run in circles of other customers like them. This means they will go out and bring back their friends who are also highly likely to be the same type of valuable customer you want.
- Know where they live, where they shop, what they like to eat, and what type of car they drive.
- Know the dates of birthdays, important events of their children, and when they take vacation.
- Understand their style, taste, fashion, and music preference.
Peter Drucker said it well in this statement: “…customers always change. The organization that is devoted to results…will adapt as they do.”. Build your business around your customers. When you create mission, vision, and value statements consider your ideal customer. Build those statements around the idea of serving that customer. For guidance on creating awesome mission statements with customer focus, add this excellent blog post about business mission statement writing to your knowledge base. Blog image sourced from © Leisuretime70 | Dreamstime.com – Customer satisfaction survey form with the pen and glasses
To know your customer is to know your business. Understanding your business means knowing your commitment to those you serve, those who pay your bills, and those who support your entrepreneurial dreams. Mastering knowledge of your customer means to understand the drivers behind why you do what you do. Identify your customer base correctly will give you a higher chance of sustainable and fulfilling success. Neglecting a deep understanding of your customer base means your business will likely struggle or suffer catastrophic failure.