While you’d like your business to engage as many customers as possible, the time-tested approach that works best for growing your business and building competitive strength is to focus on your “ideal” customers.
This includes customers who support your business because you provide something that’s essential to them, whether it’s a product or service that’s unavailable elsewhere or a niche way of doing things that meets their needs and desires. These customers form your customer base and the basis of your revenue generation and repeat business.
In this article, you’ll learn how to define your ideal customer and effectively build a base clientele of these target customers.
What is a customer base?
Your customer base is your target market for your products or services. Your ideal clientele can be defined in countless ways, including a mix of characteristics such as age, gender identification, educational attainment, profession, income level, geographic proximity to your business, personal interests, hobbies and more.
In addition to helping you build dependable revenue, knowing your core customer base will help you target your marketing dollars to reach them, so your business is more competitive in your market. The better you understand your target customer and their buying habits as well as preferences, the better you can position your products, services, marketing, sales and special promotions to them, which will ultimately convert to increased sales.
It will also help you avoid a common financial pitfall — losing precious time and financial resources by trying to be all things to all potential clients.
How to identify your ideal customer
The point of identifying your target customer base isn’t to think broadly about who might buy your products or services. Instead, think about who you specifically had in mind when you decided to open your business.
Start by answering these questions about them to help you narrow the focus:
- Who needs your products and services the most? Think about the customers that need your offerings in their daily lives, or that are most likely to visit your business. If you have a convenience store, then the customers who need your business the most are those for whom it’s most convenient — those who live or work nearby. If you have a dog grooming business, then dog owners are clearly the start of your base.
- What are your competitive advantages and how do they benefit the customers you identified? Competitive advantages help your business stand out among similar options for your clientele. For example, maybe your convenience store also offers fresh, local fruits and vegetables — something that’s hard to find in most convenience stores. Or maybe, your dog-grooming business specializes in large breeds.
- What else do you envision about your ideal customer? First, specify details like age, income level and geographic proximity. Then ask yourself the following questions:
- What are their other interests?
- Are they part of a specific industry (as may be the case if your business serves other businesses)?
- Do they have children?
- Do they purchase online, in person or both?
Think of your customer base as the bullseye in a target. Every customer in the rings outside of the bullseye is still valuable, but you’re aiming for core clientele — your bullseye. This will help you direct your funding, time and energy on those who have defined wants and needs related to your products and services and who are loyal to your brand. Also, keep in mind that knowing more about your customer base doesn’t mean that others can’t become great customers.
How to build your customer base
Once you identify your ideal customer base, you can develop actionable plans to engage them.
For example, you should know whether your ideal customers are active on social media and if they subscribe to print media. Are lawn signs the best way to capture their attention or are they public-radio fans? Maybe there’s a lot of cross-pollination between your business’s ideal customer base and the arts, for example. If so, then sponsoring a museum talk or taking an ad in a concert program may help your business stand out from your competitors and gain the attention of your key customers.
Most likely, you’ll need a combination of tactics to reach your target base. By identifying a few promising channels, you can tailor your marketing plan and financial resources accordingly.
Reward their loyalty
You’ve likely heard that it’s far easier and less expensive to keep an existing customer than to gain a new one. With that in mind, now that you’ve identified and engaged your customer base, find ways to continuously reward their loyalty.
Remember, recognition doesn’t mean lots of freebies or other things that could cut too deeply into profitability. It could be as simple as offering your VIPs access to sale inventory a day before the public or sending personalized emails and thank-you notes for special purchases. Anything else that lets them know you appreciate them will be remembered, especially when competitors try to lure them away.
Pursuit can help
Our goal is to help small businesses launch, grow and thrive. We offer access to more than 15 loan programs and a range of additional services, we’re committed to helping your small business get stronger today and thrive tomorrow.
To learn more about how we can help you, contact us today.