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It’s Important to Define your ‘Best” Customer


Many businesses, particularly start-ups who are eager to build their customer base will conduct business with anyone willing to pay despite the fact that they may not be a good fit. Customers who are not a good fit will take a toll on your business in terms of customer churn, bottom line, staff morale and resources, ultimately wasting your time and energy. The Peretto Principle states that 80% of your profits will come from 20% of your customers, so it makes sense to review which 20% are your best customers.

So how do you decide who your ‘best’ customers are and how do you attract them?

First, look at your database and identify those who you would consider the ‘best’ customer i.e. you enjoy working with them, they are not driven by price, they aren’t constantly calling customer support, they have realistic expectations and don’t demand you drop everything to accommodate them and they are repeat customers.

Secondly, look at their demographic information: age, location, gender, income, education, marital status, occupation and culture. Are their similarities? Can you start to see a pattern emerging?

Thirdly, examine their psychographic characteristics: personality, attitudes, values, interests/hobbies, lifestyle and buyer behaviour. If you don’t have this information already, it can be obtained easily enough. How you do this though depends on the type of business you have. You can search online for research, read magazines and blogs that talk about or to your ‘best’ customer. You could also follow them on twitter or become friends with them on Facebook and observe their behaviour through the information they share. Or you could call them and have an informal conversation or create a survey they can complete online with minimal fuss; all of which are economical if not free. Questions could include:

  • What movies do they watch? (Comedy, Drama, Romance, Horror, Action, Westerns, Science Fiction, Musicals, Crime, Adventure, War)
  • What music do they listen to? (Rock, Pop, R&B, Heavy Metal, Classical, Jazz, Blues, Hip Hop, Electronica, Reggae)
  • What car do they drive?
  • What is their favourite food?
  • Are they introverted or extroverted?
  • What do they do in their free time? What are their activities and interests?
  • Why did they buy your product/service?
  • Why did they buy from you at that specific point in time?
  • Did they buy right away (on impulse) or take their time?
  • If they shopped around, why did they? Where did they go?
  • What do they like the most and the least about the product/service?
  • Would they refer you to others?
  • What specific benefits do they see in your product?

Once you have identified common demographic and psychographic characteristics you can develop a profile of your ‘best’ customer. This will determine the preferred marketing mediums to reach them as well as which marketing messages will resonate with them. Basically the more you know about your ‘best’ customer, the more effectively you can develop product, pricing, promotion and distribution strategies which will attract them.

‘Best’ customers usually value what you do, are repeat long term customers and are enjoyable to conduct business with.

Startup Daily