Entrepreneurship. Rhonda Abrams
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Название: Entrepreneurship
Автор: Rhonda Abrams
Издательство: Ingram
Жанр: Поиск работы, карьера
isbn: 9781933895673
isbn:
It’s critical to clearly, and early, define your customers, because many of the other decisions you make about your business will follow from knowing who they are. If you don’t know who your customers are—their age, location, interests, spending habits, income level, and the like—you won’t know how to tell them about your product or service or how to get it to them. You could waste money placing ads on the wrong websites, sending direct mail to the wrong people, or participating in the wrong social media. Without knowing who your customers are, you could easily misjudge the price your customers are willing to pay. Know thy customers should be one of your business mantras from Day One. You must understand both who makes up your target market and the characteristics and motivations of that market.
Are customers really out there?
First, you need to figure out if potential customers actually exist. Companies have been built—and have failed—on the false premise that customers for a given product or service are, in fact, out there. You can assess whether your customer base actually exists in a number of ways.
The best way to know whether customers are out there is, paradoxically, if you have competition—if direct competitors already sell the same or similar product or service. The fact that real customers already pay real money for what you intend to sell provides the strongest indication that you’ll likely find a willing customer base. While the fact that competition exists often scares off novice entrepreneurs, the fact that you have healthy competition means customers are out there. Indeed, many investors in entrepreneurial companies like to see healthy competitors. Of course, if your competition is very strong and their customers extremely loyal, it may be difficult to attract these customers to your offerings. But, in general, the rule is that “it’s easier to get a piece of an existing market than to create a new market.”
Still, most entrepreneurs either introduce something new, improved, or different—or try to reach a new market. That means you need to attempt to determine whether you’ll find receptive customers.
Target markets and established businesses
Even if you’ve been in business for years, you still need to research your market. That’s because customers change and evolve. What was true about your customer base when you first built your business may no longer be accurate. What goes on with them now may differ from what originally motivated them to buy from you.
Learning more about your present customers can help you keep them. Your research may suggest that you need to modify your marketing activities—perhaps even your products and services. You’ll also learn how to bring in more new customers.
en·tre·pre·neur·ship key terms
Consumer or end user
The individual who will actually use the product or service and not necessarily the person or entity that purchases it.
Demographics
The description of a market by the most basic, objective aspects of the customer base. These specific, observable traits define a target market, such as age, income, gender, and occupation for consumers, or company size, revenue, and industry affiliation for business customers.
Market segmentation
The process of dividing a market into sections or “niches” that share something in common—either they behave in similar ways, or they have similar requirements. The goal of market segmentation is to tailor a product or service to appeal to each segment. This “tailoring” can include marketing, pricing, or distributing differently, or adding or deleting features.
Psychographics
Characteristics of a target market based on attitudes, values, lifestyle, desires, business style, and behavioral characteristics that may affect the buying decisions of customers.
Purchasing patterns
The typical buying habits of customers, such as number of times they purchase, interval between purchases, amount of product or service purchased, time required to make purchasing decision, where and how customers purchase product, and method of payment.
Target market
The people, businesses, and organizations most likely to buy a product or service; the people, businesses, and organizations a company tries to reach so these groups will purchase its goods or services.
To do so, you can start with basic market research—progressing through customer surveys, sampling, testing, or interviewing potential customers in focus groups (for more on research, see Chapter 3). These activities will tell you what actual members of your target customer base think about what you plan to offer. Or you can start testing in small markets to see the response to your offering. McDonald’s does this all the time: It offers new specialty sandwiches at a number of selected restaurants in a few locations, to gauge market reaction.
Notice the word attempt in the earlier paragraph. It’s important to understand that you may not be able to judge whether you have potential customers, based on traditional methods of market research. This especially applies if you offer a truly innovative product or service. The more innovative it is, the longer it will take for customers to become familiar with it, grow comfortable with it, and begin to buy it. It’s much easier to market ballpoint pens, for example, than to convince people to purchase a new device that allows them to input text into a computer without typing.
Add to that the fact that customers don’t always know what they want until they try it. Once, if you’d tried to sell bottled water to the mass market, they’d have laughed all the way to the kitchen tap. And almost certainly, if asked whether they would pay $70-plus a month to have a mobile phone, the vast majority of Americans would have answered with a resounding no. Even savvy businesspeople make mistakes of this kind. Every market test that 3M conducted of Post-it notes predicted failure—and now they’re indispensable. The newer something is, the longer it takes to catch on.
Who’s in the bull’s-eye?
When defining your target market, keep the image of an actual target in mind. The outermost ring of the target is the entire universe of potential customers—everyone who might ever possibly be interested in your product or service. As you get closer to the center of the target, narrow in on the customers who are more likely to actually make a purchase. The group at the center should be those whom you would most like to have as customers, whom you can reach and sell to affordably, and who are most likely to buy.
A target is something you aim at
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