Who Is Your Ideal Customer? 4 Questions to Ask Yourself. Uncovering your target audience's wants and needs can set your business apart.
By Eric Butow
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This is part 4 / 9 of Write Your Business Plan: Section 4: Marketing Your Business Plan series.
Understanding your customers' needs, preferences, and pain points allows you to tailor your products or services to meet their expectations. But many entrepreneurs overlook or undervalue this essential step.
"When starting a business, getting to know your customers is one of the most important things you need to do," says Noah Parsons, COO of Palo Alto Software. "If you don't understand your customer, you don't know how you can help solve their problems. You don't know what kind of marketing messages and advertising will work. You don't know if your product or service is actually something your customers will spend money on."
Related: 5 Must-Answer Questions to Succeed Targeting Your Customer Base
The basic questions you'll try to answer about your customers include:
Who are they? Describe them in terms of age, occupation, income, lifestyle, educational attainment, etc.
Also include some information on their psychographics, which classify customers according to their activities, interests, and opinions. Although an imperfect science, a psychographic analysis of your marketplace can yield essential marketing insights.
What do they buy now? Describe their buying habits relating to your product or service, including how much they buy, their favored suppliers, the most popular features, and the predominant price points.
Why do they buy? This is the tricky one, attempting as it does to delve into consumers' heads. Answers will depend on the product and its uses. Cookware buyers may buy the products that offer the most effective nonstick surfaces, or those that give the most pans in a package for a given amount of money, or those that come in the most decorative colors.
Related: How to Identify and Research Your Competition
What will make them buy from you? Understanding the reasons behind your customer's purchasing decisions allows you to create targeted marketing campaigns and adapt your product to their needs. The key question to ask yourself here is: What specifically will make them buy from you and not others? What is your main point of difference?
Although some of these questions may seem difficult, you'd be surprised at the available detailed information about markets, sales figures, and consumer buying motivations, especially if you are patient while searching the web. Tapping these information sources to provide the answers to as many questions as you can will make your plan more convincing and your odds of success higher.
Related: 4 Steps to Creating Buzz on a Shoestring Budget
