Invest In My Idea

Your customers have unmet needs or wants that can represent a variety of pains, problems, or potential gains. They are willing to do business with you because they believe that you can help them stop the pain, solve the problem, or realize a gain.

This means that whether you own a new business that does not yet have any customers or your business has a base of existing customers, your major marketing challenges are the same. First, you must identify customers whom you can help. And second, you must encourage them to believe that you are the right person to help them. Obviously, the first step in meeting this challenge is to identify your customers.

Hot Tip

If your business is new and you do not yet have an existing base of clients, pretend that you do. Instead of assembling a list of customers whom you have served, make a list of customers whom you would like to serve. Use the information in your business plan to make assump-tions about specific factors, such as total revenue generated by this cus-tomer, and to help you to identify their location and size.

Who Are Your Customers?

This list will include all individuals and organizations that have purchased your goods or services over the last twelve months. If you are fortunate enough to have so many customers that the list will be too long and become unmanageable, list only those customers who have generated a suitable minimum level of revenue. If you can’t identify a suitable minimum level of revenue, try using half of the average revenue per customer (divide the total revenue by the number of customers, and multiply the result by 0.5).

In listing your customers, include the following details about each one. If necessary, modify the suggested criteria to more accurately reflect your business.

1. Products or services provided
2. Total revenue generated
3. Timeliness of bill payments: prompt, slow, or very slow
4. Date of last service
5. Geographic area in which the customer is located: neighbourhood, city, region, etc.
6. Type of customer: consumer (includes family) or organization (private sector, pub-lic sector, or not-for-profit)

Identify Ideal Customers

Ideal customers are those who generate the most revenue for you and who pay their bills on a timely basis. These are the types of customers upon which you would like to build your business. Identify the 10 per cent of your customers who generate the most revenue and who pay their bills on time.

If you have not as yet developed a list of revenue-producing customers, skip this step and go to the next step.

Profile Ideal Customers

In profiling ideal customers who are either individuals or families, use the following criteria:

1. Demographics: What is their approximate age range, income level, education level, and marital status?
2. Residence: Where do they live: urban, suburban, rural? Do they rent or own their residence?
3. How do they earn a living?

Hot Tip

You can also use the existing-customer list to analyze different aspects of your business. Item 1, for example, will show you what goods or services you sell the most. Item 3 will show how promptly your customers pay their bills. Too many slow-paying customers can be a problem. Item 5 will show where your business comes from. If a great deal of customers are in one geographic area, are there other potential customers there that you could serve? Physically how close are you to your customers? Be sure to extract as much meaning as you can from the information that you assemble.

What Do Your Customers Need?

The easiest approach to identifying customers’ needs is to identify what you have done for them. To do this, simply review the services that you provided for your ideal customers. Assuming that your customers were satisfied with what you did, it is reasonable to believe that you were successful in identifying and meeting their needs.

Hot Tip

When identifying customer needs, it is useful to develop a customer perspective. This involves putting yourself in your customers’ place and thinking like they do. This helps you to develop a better under-standing of issues affecting them.

If you don’t really understand what they need, ask for clarification.

What Do Your Customers Expect?

As well as expecting you to help them meet specific and unique needs, your customers also have expectations about your service. Following are the most common expectations that customers have regarding the quality of service.

Reliability

Reliability involves providing what you promised to your customer, dependably and accurately. This could be simply calling the customer at a specific hour on a specific day. Reliability is nothing more than saying what you mean, meaning what you say, and doing what you say you are going to do. If you have no intention of doing what you say you are going to do, why bother saying it? If something develops that prevents you from doing what you said you would do, discuss the new development and its implications with your customer. Customers can be remarkably understanding and reasonable when kept informed.

In Nancy’s case (see Shop Talk boxes), this reliability means arriving to look at the computer when she said she would. It also means that if something comes up that prevents her from arriving when she said she would, she calls the customer, apologizes for the problem, and makes arrangements to do the work later.

Hot Tip

In setting priorities and establishing deadlines, the principles of effective time management are useful. Important and urgent matters always receive top priority. If, in the last week in April, you have not filed your personal income tax return, completing it is both impor-tant and urgent.

Next in priority come matters that are necessary to do in order to complete other urgent tasks. These generally require some form of crisis management as a preliminary step to final resolution. If you have not completed the return because you have not finalized your statement of income and expenses, it is urgent that you finalize last year’s financial statements.

Responsiveness

Customers expect you to be willing to help them and to provide timely service. This responsiveness is expected in all dealings with the customer, including each contact, from telephone calls to written correspondence and reports. Time frames should be established for those services that cannot be provided promptly. Once set, you should make every effort possible to ensure that the deadlines are kept.

Note that timely service does not always mean instant service. The question of timeliness depends upon such factors as industry standards, your customer’s sense of urgency, and your own availability. As a rule, timely service means as soon as possible. Instant, on the other hand, usually means “right now,” as in “drop what you are doing and look after me right now!”

Lastly come those matters that are important but not yet urgent. Left unattended, these matters have a tendency to become urgent as well as important. In April, it is important that your monthly bookkeeping is up to date. Left unattended until the next April, it will become important and urgent.

Hot Tip

Early in your relationship with a new customer, reach some agreement about what timely service means to you and to the customer. If your customer expects timely to mean instant, he or she should be pre-pared to compensate you over and above the normal remuneration. Realistically, few customers actually require instant service. Most are satisfied with service that is reason-ably prompt.

Assurance

Assurance is a combination of your knowledge and courtesy as well as your ability to convey trust-worthiness and confidence. It has often been said that there are two ways to appear knowledgeable.

One is to read and understand all the literature that is available. The other is to be quiet and let the other person believe that you know and understand relevant information. At the early stages of dealing with customers, the latter is the preferred approach. As well as appearing knowledgeable and interested, you can gain valuable insights from hearing customers talk about their problems in a seemingly undirected manner. Often your own objectivity enables you to develop a solution to the problem as you listen.

Building Block

In framing questions, use words and terms that you know your customers will understand. Your approach should be conversational rather than adversarial. The purpose of asking the questions is to obtain informa-tion from the customers, not to prove that you are right and the customer is wrong. There is little to be gained by winning the argument but losing the customer.

Empathy is reflected in the degree of caring and individual attention you project to customers. Although this is one of the most important customer expectations, it is often the most neglected.

The simplest method of demonstrating that you care about your customers is to listen to them. Instead of trying to impress customers with self-serving monologues, try really hearing what they say. Allow them to tell you their story; let them tell you what it is they want. As you listen, don’t engage in mental arguments with them or look for further opportunities to demonstrate your own skills and knowledge. Listen and try to understand what they are telling you. Ask questions to help you better understand what they need from you.

Many providers of technical services, such as computer consultants, are so skilled at their work that they sometimes forget that most people do not know things that the consultant takes for granted. For people like Nancy, it is important to understand where the customer is coming from and to work with the customer at that level. If your customers knew as much about your area of expertise as you do, they wouldn’t need you.

Entrepreneur Beware

Some people are so empathetic that they become sounding boards on many nonbusiness issues for their customers. This could result in spending an inordinate amount of time sympathetically listening to customers’ long tales of woe, many of which are not related to the business relationship. Make sure that your empathy does not become an opportunity for your customers to unload their life problems on you.