How Well Do You Know Your Customer?

If I had $1 for every business owner who thought he/she knew their customers very well, I’d be wealthy and retired at this point.  The sad reality is, most businesses think they know their customer, but their perception is almost always inaccurate (and sometimes by quite a bit).

I once worked with an established retail business in Rochester, NY that sold men’s fine clothing.  They were convinced their clientele were, on average, “male, 50 years or older, from the eastern suburbs, wealthy and watched prestigious networks on television like CNN.”  While that seemed plausible, I still conducted market research analysis with two main goals.  The first was to verify their customers’ demographics and the second was to research the media consumption of the actual demographic.

When the data was tabulated, it showed their customer base to be much younger and less affluent than they thought.  As a result, different television networks were a better fit.  Imagine their shock when I demonstrated how their advertising would be more effective (and cost-effective) on MTV instead of CNN!

Since seeing is not always believing, the client wanted to stick with the media plan involving CNN.  I was able to convince them to incorporate MTV into the plan as a trial, and suggested they simply ask customers if and where they saw their television commercial and keep a manual tabulation next to the cash register.  At the end of one month, MTV had a 3x advantage over CNN.

Seeing that MTV was significantly less expensive than CNN at the time, by concentrating on the proper network for their customer base, they could cut their ad spend, double their advertising frequency and triple (at minimum) their impact.  Now that’s what I call bang for the advertiser’s buck!

If you own a business, how well do you think you know your customer? If you haven’t conducted market research recently, I’d suggest there are many things you could learn.

Advertisements

5 thoughts on “How Well Do You Know Your Customer?

  1. So very true. Even harder is trying to predict who your custmer will be for a start up. That is the challenge that many of our clients at SCORE face. Working with an experienced SCORE marketing counselor can suggest ways to zero in on potential customers even with a very limited budget.

    Julian Yudelson, Greater Rochester SCORE, http://www.scorerochester.org

  2. Excellent example of how relatively simple, data driven research can both save on expenses and generate revenue. Thank you for this excellent case study.
    I would also like to strongly support Julian’s comment. SCORE is probably one of the best resources for marketing plans for start-ups as entrepreneurs are linked with someone who is an experience subject matter expert in the field they will be pursuing.
    I guess you both point to the wise advice that we should question/challenge our assumptions.
    Thanks again.

  3. Pingback: A Blast From The Past | Arthur Catalanello Consulting

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s