N Thursday, July 24, 2014
   
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Weekly Business Advice: Look at Your Leading Customers

Dr-osteryoung-headshot-new"Whatever words we utter should be chosen with care, for people will hear them and be influenced by them for good or evil.” ~  Siddhartha Gautama or Buddha (563-483 B.C.)

One thing that each entrepreneur should consider is the demographics of its leading customers.

Knowing and understanding who your best customers are will enable you to find and attract more great customers like them.

We are working with one firm that thought its best customers had incomes in excess of $250,000 per year.  They aimed all of their advertising at this demographic, and the firm was doing okay.  However, upon further analysis, they discovered that their best customers actually had incomes between $100,000 and $150,000 per year.  Following this revelation, they changed their advertising to target the new group, and their sales increased.

Another firm that we were assisting discovered that, while men made the actual purchase, their spouses had a powerful impact on the decision.  As a result of this process,the firm learned to pay more attention to the person who influences the decision, and using this information, brought a softer edge to their advertising.

After conducting a thorough analysis of its customer base, another business found that its best customers took advantage of their sales much more frequently than any others.  As a result, the firm geared its advertising to this group, targeting them with direct mail and personal calls to remind them of the sales the business was having.

It is so important that you analyze all of your customers’ habits, particularly those who account for a large share of your sales.  To conduct this type of study, you will need to sort through your customer base and pick out those who account for the highest volume of sales.  From these, select approximately 30 to analyze.

Once you have identified this group, you can use surveys or phone interviews to figure out the commonalities that exist among these customers.  While the commonality might not be obvious at first blush, in most cases, it can be ascertained by combing through the data and looking for similarities.  If you do not find any on the first pass, you should check to make sure that your questions are structured correctly.

Now go out and start collecting data from your best customers that you can analyze for commonalities and use to help develop more targeted and productive advertising.

You can do this.


Jerry Osteryoung is the Director of Outreach of The Jim Moran Institute for Global Entrepreneurship in the College of Business at The Florida State University; The Jim Moran Professor Emeritus of Entrepreneurship; and Professor Emeritus of Finance.  He was the founding Executive Director of The Jim Moran Institute and served in that position from 1995 through 2008.  His newest book co-authored with Tim O'Brien, "If You Have Employees, You Really Need This Book," is an Amazon.com bestseller.  He can be reached by e-mail at jerry.osteryoung@gmail.com.  All of Osteryoung's articles can be found in a searchable format at http://jmi.fsu.edu/Services/Jerry-s-Articles.

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