Understanding your target customer
Before you can start your business, you need to identify its
target market by working out who will be using your product or
service and what their habits are. This will allow you to determine
how you will price your offering and work out how much you will
spend on marketing.
Working out who your customers are
- If you're starting up, looking at who your customers will be
will help you to work out how you are going to market and
brand your business. Think about how your brand will appeal
to customers: if you're marketing to teenagers, you'll need to make
sure your offering is eye-catching as well as affordable.
- Once you have collected data about your customers, you will
need to break them down into different groups, or segments based on
information such as age, income, region and lifestyle. This is
called market segmentation, and allows you to
determine specifically how you will encourage each group to buy
into your brand.
- Once you have segmented your markets, work out how you
will position your business in the market in order to
compete. What will your unique selling propositions (USPs) be? Do
you make faster deliveries or better customer service? How will you
let your customers know about it?
- You can get information about who your customers are from a
number of sources, but try the following:
- The Office of National Statistics (ONS), the government
statistics agency
- Figures provided by industry and trade bodies
- Information from trade fairs and exhibitions
- Industry and national press
- Chambers of Commerce
- The internet
- Competitors
- Competitors' annual reports (which can be downloaded from
Companies House if they are a limited company)
What to find out
- Begin by looking at your customers' demographics -
what their profiles are. Look at:
- Age
- Income
- Level of education
- Gender
- Race or nationality
- Family status and size
- Your customers' behaviour is also crucial to how
you present your business. Find out:
- What they spend their money on
- What their habits are
- How loyal they are to other brands
- What their interests are
- How often they spend their money, and how much they spend
- Your customers' location will have a big impact on
how much they spend and how frequently they buy. Find out:
- How far they live or work from your premises
- What sort of area they live in
- If it's further afield, what the climate is like
Resources
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