Every small business owner strives to attract more customers. But if you’re just trying to get more customers, you’re selling yourself short. Instead, you should aim to get more of your ideal customers.
Ideal customers can have a lot of characteristics in common. They may be your most loyal customers, the ones who visit your business the most often, the ones who spend the most money, the ones who serve as brand advocates for your business or the ones who are the easiest to deal with. In business terms, however, your best customers are those with the greatest customer lifetime value, or CLV. (This article and interactive tool will help you calculate CLV.)
Once you’ve identified the customers with the greatest CLV, dig into the data you’ve collected about them from purchasing records, loyalty software, customer relationship management (CRM) software or other records. Identify key characteristics and look for similarities.
For consumers, elements to consider include your best customers’ age, race or ethnicity, gender, marital status, household income, whether they have children, education level, occupation, where they live and whether they are homeowners. Beyond these basics, you can also look at behavior such as which websites, publications or social media they use, their hobbies and their interests.
For businesses, elements to consider include how long the company has been in business, annual revenues, industry, number of locations, geographic location, and how many employees the company has.
Whether your customers are businesses or people, in order to identify your ideal customer, you also need to ask these questions:
- How did your best customers first learn about your business?
- What prompted them to buy from you?
- Why do they remain loyal to your company?
- When buying products or services like yours, how do they research the decision?
- What information sources do they use in the research?
- What are their biggest pain points/needs regarding products and services like yours?
- Why do they prefer your business to your competitors?
To go beyond the numbers in your records and answer these questions, you’ll need to do some additional legwork.
Go online: Use social listening to see what your best customers say about your business on social media. Are they sharing photos of your latest restaurant dish because it’s rainbow-colored and ideal for Instagram? Are they on LinkedIn writing stellar recommendations for their account service rep? In addition to seeing what specific customers are saying, be sure to keep tabs on your businesses online ratings and reviews. What do your five-star reviewers say about your business? You’ll undoubtedly find many commonalities.
- Do a survey: Ask your best customers questions using an online survey, mailing a survey form or calling them. If you have a B2C business, you’ll get more responses by offering customers a reward, such as a discount or gift, in return for completing the survey. If you have a B2B business, make the survey part of an annual or biannual “checkup" making sure the customer is satisfied.
RELATED ARTICLE: The New Consumers: What Do They Want?
Using all the information you’ve gathered, you should be able to come up with a pretty clear picture of your ideal customer/s. (You might have more than one ideal customer.) For example, a B2C clothing retailer might discover that its ideal customers are single women in their 20s who live in suburban areas, make between $36K and $55K a year, are avid Instagram users and get their fashion ideas from bloggers and social media. A B2B restaurant supply company might find that its ideal customers are upscale, independent restaurants in urban areas that purchase sustainably manufactured or recycled flatware, linens and dishes.
By understanding your ideal customers, you can focus your advertising, sales and marketing efforts on others like them. That boosts your ROI and your profits.
About Rieva Lesonsky
Rieva Lesonsky is CEO and Co-founder of GrowBiz Media, a custom content and media company focusing on small business and entrepreneurship, and the blog SmallBizDaily.com. A nationally known speaker and authority on entrepreneurship, Rieva has been covering America’s entrepreneurs for more than 30 years. Before co-founding GrowBiz Media, Lesonsky was the long-time Editorial Director of Entrepreneur Magazine. Lesonsky has appeared on hundreds of radio shows and numerous local and national television programs, including the Today Show, Good Morning America, CNN,The Martha Stewart Show and Oprah.Lesonsky regularly writes about small business for numerous websites and for corporations targeting entrepreneurs. Many organizations have recognized Lesonsky for her tireless devotion to helping entrepreneurs. She served on the Small Business Administration’s National Advisory Council for six years, was honored by the SBA as a Small Business Media Advocate and a Woman in Business Advocate, and received the prestigious Lou Campanelli award from SCORE. She is a long-time member of the Business Journalists Hall of Fame.
Bank of America, N.A. engages with Rieva Lesonsky to provide informational materials for your discussion or review purposes only. Rieva Lesonsky is a registered trademark, used pursuant to license. The third parties within articles are used under license from Rieva Lesonsky. Consult your financial, legal and accounting advisors, as neither Bank of America,its affiliates, nor their employees provide legal, accounting and tax advice.
Bank of America, N.A. Member FDIC. ©2017 Bank of America Corporation