I was introduced to my friend’s dad few weeks ago, he was an owner of car coating and tinting company, but long story short – he is a distributor of well-known brands for car tinting & coating.
He was looking to grow his business through online, but he didn’t know where to start. Coincidentally, my friend know that I’m consulting businesses whenever I’m free – that’s how we got linked up.
We met up and here’s how it went during our first discussion:
“How much do you know about your customers?”
“How is their purchasing behavior like? Do they research first before they buy?”
“What kind of cars do they normally drive?”
“What type of films do you sell more? What is the proportion like?”
He had the general gist of how the business worked but as we go deeper into how each customer segments are performing, here’s what we realized.
He didn’t know much about his customer segments and their behaviors.
Most Businesses Don’t Really Know Their Customers Inside Out
The key phrase here is knowing them inside out.
Just like every business owners out there, my friend’s dad focuses on month on month revenue growth. From a business perspective, it’s a standard metric to review upon when you’re tracking growth, but when it comes to scaling and marketing your product, it may not be that helpful.
Wanting to grow business is one thing, but how to grow your business is a separate question all together.
Revenue doesn’t tell you how to grow your business, but customers will. Because they are a bunch of communities out there wanting to discover the same thing.
I can totally relate to how he thinks – as a business owner – I just wanted to grow my business overall, does it matter if I know which segments perform best? As contradictory as it may sound – yes it does.
Simply because these few niche segments are your sweet spot – they are willing to pay because you provide value to them.
Because the root of your income is your customer – the more you understand about your customers, the better you can talk and market to them.
With the lack of comprehension on your customers’ profile, most SMEs would then, craft out a marketing strategy which may or may not work as intended. The whole thing becomes a gamble, a huge investment risk simply because you don’t understand your customers inside out.
Customer Profiling – Understanding Why They Buy From You
Running customer profiling tells you a lot of things. It can come in the form of cross segment analysis (i.e. demographic VS salary range). At the end of the day, it should tell you about who and why they buy from you.
Here a simple analysis that I did after the discussion:
- Identifying car brand, followed by car value, which helps me to identify salary range.
- Identifying their purchase item, followed by pricing & main USP of the purchased item.
- I also did some validation on whether it made sense to target these respective segments online. (Note: not all businesses need to be online to work, you need resources to grow and maintain website.)
How did I identify salary range? I did this based on car loan repayment – which technically shouldn’t be more than 30% of your salary range. This indicative figure helps me to nail down the salary range which reflected on your working experience.
It’s not the best way to assume your target market, but given the lack of data, this gives me a gist of how the market is performing and who actually buys premium products and the differences between segments.
By combining both customer insights and buyer journey – I have a full picture on how they buy – at what stage did they get to know about you, and to what extent you can scale your marketing effort throughout their buying journey to convert them into sales.
Simply put, I know where to channel my money in for the effective marketing.
Opportunities Lies Amidst of Buyer’s Journey
If understanding customer is knowing their personalities and behavior, then buyer’s journey is a series of steps they went through to get the item.
It’s a same-same but different. While they go through the similar steps, but the way that they react to medium is fundamentally different. For my friend’s dad business, it’s all about exposure.
By knowing their personalities and journey, I can craft out strategies that maximize exposure before you make the purchasing decision. Through online alone, I have at least, a minimum of 4 touch points prior reaching to that stage, not counting the market validation technique through Google Adwords.
If I didn’t went through the fact-finding phase and went straight on into crafting campaigns, I dare not say it would end up failing, but I would say it wouldn’t be much success either.
70% of the buyer’s journey is complete before a buyer even reaches out to sales. – SiriusDecisions
This is why I believe that understanding customers and their journey is fundamental in growing your revenue. Only through understanding them, you can craft out a nurturing journey which nudge them to know more about you.
Do you agree with me that understanding customers is key to crafting marketing strategy? Share your thoughts with me below.