This continues our series on Using Your Business Plan. We realized we needed to define “your client” before analyzing your competition. So, we added the extra blog this week. Enjoy!
The key to business success remains the client or customer. Several businesses use the motto “The customer is always right”. Clients pay the money that create your salary and profit. Understanding and defining your client saves you big money.
Wendy’s Story
Wendy Bird found a unique angle to the jewelry market. She noticed the incredible poverty during a trip to the Philippines. She saw women making beautiful pearl jewelry, but selling it on the streets for practically nothing. Wendy also knew women living in the United States that would love this jewelry. So, she created My Princess Pearls importing the pearl jewelry to the United States.
Wendy also studied her potential clients. She identified a very specific market niche. She focused on middle class women—and their daughters—as her target market. She narrowed her focus to people earning between $45-120,000. She also knew that the people in her market area had generous hearts and gave service freely. Her market niche included women and men who wanted to improve society.
Her marketing plan emphasized not just the quality of the jewelry, but the conditions of the women who made the pieces. She ensured that her clients knew not only that they were getting a beautiful pearl necklace, but that a substantial portion of the lower than usual prices went to help the women who made the necklace get out of poverty. She created a foundation that sponsored clothing and medical drives among her clients to prepare containers of goods that she sent to her manufacturers’ neighborhoods.
Wendy’s understanding of her potential clients allowed her to develop a very successful business and change thousands of lives in the process.
Define Your Client
Too many business owners think that their product will appeal to everybody. They fail to sufficiently define their potential client, so the employ inappropriate marketing venues, messages, and other methods that result in very expensive low sales.
You should define exactly who you want to reach as your market niche. The more specifically you define them, the better you can envision them, the more you understand them. Understanding their buying habits, motivations, places they spend time and money, and more helps you save money by targeting your marketing dollar to the best possible use. It helps you design a product or service they want to use. You will remember that we discussed the Client Development Team and Pivoting process in a previous blog. This helps make that happen. The more specific vision of your client, the better you may serve them.
Questions to Ask
The following questions may help you define your potential client. We divided them into topic areas you to help you create your own questions:
Personal Characteristics
- Who would buy your product or service? An individual? A business?
- What age would the typical purchaser be? What gender? Race? Nationality?
- What does your client do with their money, time, and passion?
- How would they use the purchase? Personal use? Give it to someone else? Resell it?
- Will they use your product or service in the processing of a different product?
Purchasing Parameters
- How much does your potential buyer earn? How much extra cash do they have?
- Does your client consider your product a necessity or luxury? Or in between?
- How much money will they spend on a product like yours? How often will they buy?
- Can your client buy it themselves or do they need someone else’s permission?
Habits
- How does your client usually make purchases? Where do they make them?
- How and where does your client spend their time? What percent? When?
- What do they read, watch, listen to, or attend?
- How technically savvy is your client? Do they phone, email, text, or post?
Interests
- What does your client need? Do they recognize the need?
- What causes, service, clubs, or other association does your client maintain?
- What trait about your client uniquely suites them to use your product or service?
- What question have you not asked about your client?
From the answers to these questions you will draft the client profile section of your business plan.
Resources for Developing Client Profiles
The Small Business Administration offers a wealth of information for business owners including demographic statistics and articles about client profiling. The US Department of Commerce shares demographic information from the US Census. Industry or professional associations may share information for business-to-business (B2B) clients. You can also Google information about almost anything. Bigger business may also wish to use the Stakeholder Salience Model developed by Brad Agle to more clearly define the stakeholders in your business.
The better you can picture your client, the better you can serve them. Some businesses place pictures representing their typical and actual clients where management and employees can envision who pays their bills, salary, and overhead. Defining your current and potential client focuses your efforts on solving their problems or satisfying their needs.
We hope you enjoyed this extra blog this week. You may continue to read about “Who or What is my Competition?”
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