SCORE Small Business Blog

How to Get Better Customers to Grow Your Business: Part 3 of 5
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Understanding How YOUR Customer Thinks

Understanding customers is so important that large corporations spend millions of dollars annually on market research to gain this knowledge. Although formal research is important, a small business can usually avoid this expense. Typically, the owner or manager of a small business knows the customers personally, which is an added advantage. From this personal foundation, understanding your customers can be built through systematic efforts.

What

Find out the customers’ needs, as the common names of products mean as little to them as the chemical names on the label of a proprietary drug. A sick person’s real need is safety, speed, and relief. Understanding your customers’ needs enables you to profit by providing what buyers seek – satisfaction results.

Products change, but basic benefits like personal hygiene, attractiveness, safety, entertainment, and privacy endure, as do commercial purposes such as quests for competitive superiority or profitability. Successful manufacturers, retailers, and service businesses produce benefits for which customers are willing to pay. In other words, successful businesses understand the reason for their customers’ buying decisions.

Why

Determining why customers choose one company over another is challenging. Customers themselves don’t always know. They may think they patronize a business because the products or services are better than another’s, when in reality it’s something else. Perhaps they know, like, and trust the employee or salesperson that is the company spokesperson. Or maybe their business associate or friend mentioned it to them last week.

The reason customers buy is based on logic from “their point of view.” Understanding customers derives from this fundamental premise. Every customer has unique and individual goals, pressures, and purchase criteria. If customers feel indifferent toward a product or business, the selection is more apt to be happenstance. Just as important as why customers buy is why former customers take their patronage elsewhere. Also, why are qualified buyers not buying? What is keeping them from buying? Many factors affect why a customer will buy products or services from you rather than your competition such as Awareness, Features and Benefits, Price, Brand and/or Reputation, Convenience, and Word of Mouth.

When

Many buying decisions from customers are postponed because there is not an emotional motivation for the product or service being offered. Timing is critical for the standard 3 to 5 percent buying cycle timeline for your customer. This is the time cycle percentage when customers are most likely ready to buy. The other 95 to 97 percent of the time, they are just shopping and do not have an emotional buy in.

When customers are ready to buy, be ready! A business must be ready to sell when the buyer is ready to purchase, lest an opportunity be irretrievably lost. Customers buy when they want an offering that is relevant to them and when they have time and money to purchase it. Keeping a customer relations management database with pertinent buying patterns is a great way to focus on this.

How

Customers make purchases to satisfy needs. These may be economic, physical, or emotional needs. Customers may perceive wants and needs to be the same. If customers need something, they want it. If customers want something, they need it.

It is important to remember that needs and wants are not always generated by a problem that needs to be solved. Personal preferences and desires of customers play a large part in customer purchase decisions. It has been found that buyers generally behave rationally whenever buying decisions are made. Customers buy to gain the benefits of the products and services they find of interest. If customers do not think they are getting a good deal, you are not likely to close a sale.

To sell anything, whether in a retail store environment or on the Internet, you have to understand the typical steps that your customer will take before handing over hard-earned cash such as Recognition, Information Research, Examination of Alternatives and Buying Decision and Purchase Evaluation. Once the purchase is made, there is a strong and logical tendency to examine the decision.

Where

Whatever location is chosen for a company, make an effort to become familiar with the habits, likes, and dislikes of your customers, whether in a retail environment or on the Internet.  Location is extremely important to “captive” buyers. If a company is easy to get to and is well branded for location, a customer will stop by on the way to work, at lunch, after work, or even take part of the day to come visit.

Other customer influences include the type of product or service, the type of store, and the characteristics of the customer. The offered products and services’ perceived quality, depth, breadth, and price are very important. This does not imply that all products have to be top quality or that all prices need to be the lowest.

Who

Not everyone is your customer and it is sometimes difficult for small business owners to acknowledge this. However, when they do, they can best advertise and market to their target customer.

While you can’t win all the customers all the time, you can win with a certain demographic when you create a unique niche for yourself using decor and special catalog items that satisfy your chosen group of customers.

Having a good understanding of customers enables a company to increase sales and revenue. This same understanding can equally serve to reduce costs. Higher sales at lower costs inevitably boost profits.

Overall, it may be your service – not your price – that dictates whether or not you secure customers for the long term. If you give customers what they want, the way they want it, when they want it, and follow through with a fast finish in the end, you are much more likely to turn those customers into satisfied repeat customers.

DJ HeckesCEO & Author
DJ is CEO of EXHIB-IT! Tradeshow Marketing Experts and Full BRAIN Marketing and focuses on educating and training companies to significantly improve their small business marketing strategies. She also presents customized training programs for business marketing, social media, leadership and trade show marketing.
www.exhib-it.com | Facebook | @DJHeckes | More from DJ

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Discussion (2) Comment

  1. I’ve read the article and really agreed! I want to highlight UNDERSTANDING what your customers thinks. Without understanding there would be problems and might be bad for you and your business. Thank you for this wonderful tips and advices I can’t wait for part 4 and part 5.


  2. Lisa SherlinVisitor

    I have signed up for one of you webinar on how to get better customer to grow your business and I see this one part 3 of 5. So I don’t which webinar I am signed up for and if I have missed 1 and 2 where can I get that information. Marketing is one of the most confusing things to me and I am trying to figure it out and I have even taking other classes on it and I still can not figure it out. I understand on getting the demographics on your clients but what do you, do with it once you get it. How do you know how to target those clients. I have a tax business and some people tell me price doesn’t have any thing to do with it and this article says the same thing. It says service is on how the client wants it and I agree with that and that is what we do for our clients. But price does seem to be a factor also. I feel like as if the client thinks well why should I pay you xx when I can go to this other place for xx. I also get confused as to how I am to figure my pricing. We offer a service so how do figure a price on a service you provide. There are so many things to consider when it comes to you providing a service. Knowledge, time, computer software, education. How do you facture all of that in and still be competitive.
    I just did a website for our business and I am going at it slow. I am nervous about it also. I have look at some competitors website and I think about things with their website that I don’t like and I don’t want to make the same mistakes. I have received help from Score before and I have attend classes that you have offered. I really appreciate all that you do and I appreciate any help you can give me on the Marketing as this is an area that I am definitely weak in.

 

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