How well do you know your customers? Since customers are critical to the survival of your business, understanding what they value about your product is essential. Obviously, without customers, the business has no revenue. But how many businesses take the time to make contact with these key stakeholders in order to identify what they value most about what you provide?
Customer segmentation - you’re too busy, right?
If you currently survey your customers then you may already be familiar with customer segmentation. This is the process of defining different groups of customers with individual needs so that you can not only tailor your communications to achieve maximum effect, but also refine the products and services which you provide to them. Whilst customer segmentation is a basic requirement of any marketing strategy, it is a key process in setting the price. Customers vary in their characteristics, and their sensitivity to price too. For some customers, the price is so critical that they will only be prepared to pay up to a certain level, whereas others are more concerned with quality and service, so the price is likely to be less of a deciding factor.
Each customer segment will have a different set of needs, considerations, and potentially different applications. Therefore, identifying and understanding these will inform you as to how best to go about the business of marketing to those customers and setting the price.
Knowing your customers is as important as knowing your competitors
It’s commonplace for a business to skip strategy and head straight into tactical promotion, bypassing the critical research and analysis phase of understanding the market they operate within. But a business that takes the time to engage with customers, discovering what they value about that business, is one that benefits from an insightful perspective. This perspective allows firms to tailor an offering in terms of application and price to best match the customer's expectations, delivering maximum value in the process. Central to this approach is understanding how the competition also provides value. If a rival firm is offering an equivalent solution for a similar price, the customer purchasing decision may end up being based on factors such as relationship, operational or location preferences. Therefore, developing a competitive edge over your rivals is a key factor in influencing that purchase decision, so developing that edge depends upon your knowledge of the customer and their needs.
So if you don’t know your customer, how can you develop an edge?
By systematically approaching your customers to gain feedback, you not only build a profile of those users of your products and services, but you also discover detailed insights into how to refine your solutions to deliver superior value to them, and in doing so ensure that your brand remains top-of-mind when they are considering where to place an order. You will also develop a more thorough understanding of those opportunities where marketing can work for you, and how to go about doing it, making your sales effort a slicker and more effective process.
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