Know Your Customer

Three simple words – yet sometimes small businesses don’t take the time to better understand our customer. A customer analysis can really cure this!

Your customer analysis should answer a few questions:

  1. Who are your current/potential customers?
    Ideally you would look at sales data. Look for trends or buckets. Maybe you ship all over the U.S. but have spikes in California and Chicago… why is that?
  2. Why do they buy?
    This is really getting at your customer’s perceived value of your product.
  3. How do they make purchasing decisions?
    Some people like to read other comments on the product. Some are heavily influenced by what their friends purchase. What is true for your customer?
  4. Where do they buy your product?
    Are your products for sale in a very general marketplace, like Amazon, or do you sell your organic hair products out of salons in the area. Which salons have higher order numbers? Why?
  5. When do they buy?
    Is your product more popular in a season or month?

Exploring this data will paint a much better picture of who your customer is. Understanding your target customer is key to finding better ways to present your product.

Seek out qualitative and quantitative data to answer these questions. Qualitative data is mostly gathered by customer focus groups. Quantitative data should come from the records you’re keeping. When was the last time you analyzed your web stats to understand your traffic patterns for the website? Surveying customers has become quite popular as web advances have made sending and analyzing surveys easier.

>>Quick Tip: SurveyMonkey & Zoomerang offer some free survey products worth checking out.

Surveys can be consuming. Other ways to get customer data include mining the information you have or doing focus groups. It can also be beneficial to see who you’re targeting and who’s actually buying. Sometimes reconciling the two can be very enlightening.