February 21, 2011
“The absolute fundamental aim is to make money out of satisfying customers.” ~John Egan
Simply stated yet often a major failure of any business, small or large. In this next series of posts, we’ll take a look at the art and science of finding and keeping customers.
Every business needs customers. Ongoing revenue is key to keeping revenue flowing and your business in operation. Some business can succeed with one time or occasional purchases if the volume of customers or the product is high. Consider a Ferrari dealership: How many customers purchase per month? How many times does the same customer buy per year? I’d guess the numbers are pretty low, but unless your service or product is very expensive and exclusive, repeat business is vital.
Getting and keeping these customers requires research to gain insights into the industry, competition, customers, product, and the marketplace. Research is required to support fact-based business forecasts and plans; without the proper research your business plan is fictional, based on hope and wishful thinking.
What research reveals:
– If a market exists for your product or service: Knowing this in advance saves time and money invested in a futile effort.
– The target customer(s): What demographic – age, gender, ethnicity – are you targeting? Which geographical area?
– Can the market support your product or service: Does too much competition exist in the computer repair industry? Is your offering unique or positioned to take advantage of a new product?
– Customer motivation: What makes people want to buy the product or service you offer and more so, why? You need to know why people want to buy this product and why they want to buy from you. Equally as important is the opposite. Why don’t they want this product or what turns them away from your business and to the competition.
In summary, market research will reveal if the potential exists for your business and what strategies are key to success. Do your homework before jumping into the business you THINK will succeed. Selling bottled water to a drowning man may not be such a great idea, but life vests and swimming lessons may have a market niche.
By Dion D Shaw
Dion Shaw is the founder and owner of homepreneurs.