Your Future Customers
You need to know who wants to buy your product, and why they choose to buy. It is not enough to simply say that ‘people’ are likely to want your product. Instead, you need to have a clear picture of who these people are. Even if there are many types of people who could be interested in what your business has to offer, it is still very important to decide who your target market will be.
Profile Your Ideal Customer
You can start by forming a picture of who you think your ideal customer would be. Your product or service may have some appeal to a number of people, but you need to think about factors such as:
- Who would buy it the most? How often would they buy it?
- Who would be prepared to pay the highest price for it?
- Who is likely to be the most loyal type of customer?
- Why would they want your product? What needs would it fulfil for them?
Try to come up with a clear picture of who your customers are. Think about details such as:
- Their age, gender, and ethnicity
- What type of job they have (or if they work, are a student, etc.), and how much they earn
- Where they live
- What their family situation is (e.g. do they have a partner? Children?)
- What their values are
- What problems they are facing and why they would want your product or service
- Where they currently shop to fulfil their needs
- The ways in which they expect to be able to buy
If you expect to have several types of ‘typical’ customer, create a profile for each one. Once you conduct further research, you may decide that focusing on one or two of these groups is likely to be more profitable than targeting them all. Having a clear customer profile also helps later on when it comes to developing your branding and methods of marketing.
Customer profiling should be an ongoing task which continues throughout the life of your business. Markets and customers change, so regularly revise your customer profiles.
Explore Your Market Size
Once you have a detailed picture of your target market, you must figure out how large it is. That is, you will need to conduct research to see how many people fit your customer profile(s).
For instance, if you have decided your services will most likely be purchased by businesses within the surrounding 100 kilometres which have 10 to 50 staff, it will be important to find out how many businesses of that size exist in your area and where they’re located. You can do this through secondary research: that is, looking up existing data which has been collected by other individuals, businesses, or organisations. Often, the best source to use is Statistics New Zealand and, in particular, data from the Census which is conducted every five years.
However, you should also conduct research to check whether your ‘ideal customer’ will, in fact, want to purchase your products or services, and whether they will do this as often as you think they will, and at the prices you expect them to pay. This is best done through primary research: that is, gathering data directly from potential customers through, for example, surveys or focus groups. You may find that you need to adjust your target market, in which case you’ll need to do more research to see how many people fit the profile of the new target market!