Know Your Customer, Grow Your Business
“Anyone can be a customer of my business.”
I have heard this time and again from small business owners. In the rush and desire to grow their business, they see no problem with wanting everyone to be a customer. And let’s face it: who wouldn’t? However, in order to grow your business in a sustained way, this statement is actually (and probably counter-intuitively) unhelpful. To attract customers to your business you need to know who they are, what they want and how to engage with them so they choose your business to buy from. And once in your business, you need to keep them coming back for more.
You can only do this if you know exactly the types of customers who are a good fit with your business. So, let’s assume you are a vegan café, using ethically sourced, local ingredients to create home-cooked, healthy food that tastes delicious. As the owner of this business, you could claim that anyone and everyone could be a customer.
The potential customer who is looking for a cheap and filling breakfast and loves a few rashers of bacon? Well, she would be better off going down the road to the greasy spoon, there’s no bacon to be found in your kitchen.
The potential customer who needs a quick take away lunch to eat on the bus? They need a ready-to-go sandwich, not a hand cooked meal that is prepared from scratch with love.
The potential customer who is on a very small budget for lunch? There’s a fast-food place two doors along, she will find a lunch to fit her budget right there.
So whilst in theory, the café could serve anyone, they shouldn’t want to. The bacon lover, the customer in a hurry, the customer on a budget – these are not your ideal customers. As a retail business, you can rely on the passing trade, those that just happen to be passing when they need what you sell – this will always be a certain part of your income. But a place where customers who truly love what you do, agree with what you stand for as a business and see their own beliefs and desires reflected in what you do and how you do it – they are the customers you truly want. Why? Because they will go out of their way to seek you out, understand the value you bring to what you do, be prepared to pay what it is worth, and ultimately, fall in love with your business. At which point, they will become an absolute advocate for your business and spread the word – thus generating more customers for you.
Your ideal customer types
So far so good. But how does a business define the ideal customer? I work with lots of small business owners to do just that and it does not have to be a complicated process. Firstly, think about those types of customers that you already have that are ideal for your business – those that spend money with you, and give you repeat business. Now define each type using our Ideal Customer Profile tool below. The more specific you are, the better – you will be creating several profiles that represent the different types of customers that you have. Then think about the customers you want – those that as yet, you don’t have in your business but you would like. Create profiles for these types too. One last thought about how you name your types. You can stick to something factual, such as ‘men aged 45-55’. But better to really bring your customer type to life with a more engaging name. I worked with a beauty salon owner who gave her customer types a name of one of her customers that truly represented that type – so she had ‘Eyebrow Kathy’ and ‘Nails Susan’. Alternatively, create a name that sums up what this type feels is most important – such as ‘conscious eater Kate’ or ‘local produce Pete’. Complete a card as shown below for each customer type you have or want.
Going through this exercise to create your Ideal Customer Profiles will give you a clear idea of who you need to engage with. So when you write your website copy, or a blog, or tell people about your business in networking, or put a poster up in your shop window, you can clearly articulate who you are looking for, what is important to them and how you can help solve their problem. If people see themselves reflected in this story that you tell and the solutions you are offering, they will engage with your business, because they will subconsciously understand that your business is tailored for people just like them.
Building a pyramid of customer love
One you are attracting the right types of people to your business – whether that is a vegan café, an online toy shop or a dog walking business, your next challenge is to keep them coming back. There is an old business adage that is can be up to seven times more expensive to get a new customer than retain a current one and there is truth in that, given the cost and time of marketing and sales. But getting a customer into your business for that first transaction does not mean no further investment is needed. Quite the contrary. This is where our Pyramid of Customer Love comes in. You need to purposefully map a customer type’s path from that initial transaction, to the point at which they are loyal, recurrent and in short, a raving fan.
What can you do to ensure customers come back after their first interaction with your business?
Next, add value. How can you add value to the customer experience? A café could ask a returning customer if they would like to follow the Facebook page for free recipes. A business coach could offer clients free downloadable tools that will help them run their business. What can your business offer that the customer perceives as valuable and will help them think positively of you?
Then, start to build trust. What relevant knowledge can you share to help position you as the expert in your field? A café could talk about their impeccable quality standards and demonstrate this with every plate of food that leaves the kitchen (no luke-warm baked beans on those plates, thank you). A nutritionist may create a short series of useful videos for social media that shows her expertise and insight. What can you do to make your business the go-to ‘expert place’ for your customers?
Now you can start to really delight your customers and build in some ‘wow’ moments. A customer who has just signed up for year two of your online yoga club could receive a handwritten thank you card. A regular customer at the café could receive a complementary coffee and cake on her birthday. These things do not have to cost the earth but are there is put a smile on your customer’s face. At which point, they may just fall in love with you and could even take to social media and talk about your brand, or mention you to their friends or colleagues, thereby spreading the word about how wonderful you are. How can you put an unexpected smile on your customers’ faces?
Finally, your customer is at the top of the pyramid. They love your business and what you do. But don’t get complacent, there is work to do to keep them there. How do you remain an important part of your customers’ lives or works? Can you make them look like a star? An accountant may feature a client in the monthly newsletter, talking about their success and brilliance. Can you continue to delight your customers? A little Christmas gift? A special offer for long-standing customers? A loyalty programme that gives them treats or benefits that they perceive as high value? You have worked hard to get your customers to the top of the pyramid, so spend some time working out how your business can keep them there.
Small businesses don’t often have big budgets to win and retain customers. But it is not the size of your budget that will determine your success in this area. Get your customer profiles right and any marketing communication will stand a much better chance of engaging the right people with your business. Get your pyramid of customer love planned effectively, and with a small budget and a big desire to keep your customers delighted, you will reatain all those lovely customers and they will help you bring more custom to your door. In the end, with a fair wind and a few smart ideas, you might even need a bigger door.
The Business Allotment is a small business that helps other small business owners grow their business through great ideas, effective strategy and support.