With all the advancements in technology and data collection today you may think you have a pretty good idea of what your customer base is like.
But do you truly have a comprehensive understanding of who your top customers are (beyond just demographics) and are you effectively marketing to them in order to achieve a maximum return on your investment?
How Can You Determine Your Best Customers?
While it might seem obvious, the first crucial step towards understanding your best customers is identifying key traits and attributes. A good start is finding repeat business. Those repeat customers have not only demonstrated loyalty, but are also likely to be future advocates to their friends, family, and professional network.
Secondly, you’ll want to keep an eye out for which customers are spending the most money. It’s important to note that although a customer may have spent the most money with you business at one time, doesn’t mean they’re the best customer and are going to support your business in the future. It would be beneficial to look at this metric in relation to a specific time frame. Perhaps quarterly, monthly, or whatever makes the most sense for your business.
Third, look for the customers who you actually want to do business with you. Not every type of industry can do this, but you can pinpoint those customers that you know by name; the ones who are easy to work with, value your expertise, and are evangelists of your brand. These are definitely part of your ideal customer base.
Finally, don’t forget to segment your customers based on who is shopping when you run promotions versus who is willing to pay full price. While repeat business is great, if certain customers are only purchasing when there’s a special, they may not be connecting with the full value or your product or solution and not willing to make those big ticket purchases. You’ll want to focus your marketing on those people who are willing to pay full price.
How Can You Better Understand Your Best Customers?
Understanding your best customers can be accomplished effectively, you just need to take several key factors into consideration. From a big picture standpoint, you’ll want to think about their motivations and what is causing them to take a look at your product or service as something that is valuable to them.
Some customers are motivated mainly by price, and will only take a buying action when there’s a sale or promotion. While others are motivated by special events or holidays. This can be especially true for seasonal retail businesses that are affected by the holidays, back to school shopping, etc.
Think about what need or problem that certain customers have that you are fulfilling. Some businesses, such as auto repair, perform a necessary service and there is a well defined ongoing service arrangement. Other services, like entertainment, serve to fill a desire more than a necessity. No matter what business you’re in, you’ll need to dial in on your customers key motivations (or benefits sought) in order to speak effectively to them in your marketing.
Lastly, take a deep dive into what kinds of marketing your customers are most responsive to. This can vary widely depending on what kind of audience your business serves. Do they consume regularly consume traditional media such as TV and radio? Or are they on-the-go and likely to be picking up the local paper or magazine for updated news and events? Also think about what kind of digital media they are consuming (because every demographic is online--not just Millennials). Look at this carefully, and never assume, as this will help you a lot with choosing the right marketing mix for your business.
Keep in mind that this is not an extensive list of how to research your customers, but meant to get you thinking and headed down the road of more precise data collection and conversations to help you ultimately make wiser marketing decisions down the road.