Market and Customer Clarity
Welcome back to my “Business Performance Matters” blog series. Previously we identified 9 critical characteristics for business clarity, followed by a blog with more detail on how to obtain clarity on your Vision and Purpose. As we continue down this path, today we will focus on gaining clarity on your Market and Customer.
The first step in obtaining Market and Customer clarity is to accurately define what industry segment(s) you operate in. Knowing that you’re in the manufacturing industry versus the service or retail industries doesn’t tell you much, but refining that into an understanding that you are in the wholesale distribution of children’s toys for children between the ages of 5 and 12 definitely helps determine market and customer definition. Finding the right industry classification is critical to obtaining accurate market data, recognizing competitors, and benchmarking your performance against your peers. Your industry classification can be found in the North American Industry Classification System (NAICS). The NAICS Association provides numerous tools to ensure that you have identified the right industry classification. One word of caution, US business tax returns have a space for your NAICS code. I recommend that you go through the process of
independently verifying your industry classification. Many tax preparers will choose the general classification when a more refined classification is more appropriate for business management purposes.
Target Market and Customers
Market clarity is obtained by Defining Your Market, Conducting Market Research, and Monitoring Market Changes. As you approach this effort you may find that using third party resources may expedite the process and provide more detailed and valuable information. The first step is to identify the key characteristics of your current and potential customers, including their age, gender, location, income level, education, etc. These Demographics will assist you in establishing the right marketing approach, products, and services.
Once you’ve identified this preferred and/or ideal group of customers you need to understand their lifestyle, interests, values, challenges, pain points, motivations, goals, and desires. Obtaining this level of clarity on the Psychographics will help further tighten the alignment of your products and services with your market. All this information helps you create a Customer Persona to visualize to whom you’re marketing and to tailor your messaging appropriately.
When trying to analyze your customer’s needs and pain points you may want to use social listening and customer feedback. Monitor social media where your potential customers discuss their frustrations and preferences. This insight can help you shape your product/service offerings as well as your marketing messages. For existing customers, without being a nuisance, use reviews, feedback forms, or actual customer experience stories from staff or customers to gain insight to their needs and pain points. This helps you identify which problems they’re trying to solve.
After you have a clear picture of your market, you need to determine how the they behave when interacting with products and services like yours. Think about their purchasing process, the importance they place on brand loyalty, how, and how frequently they use the product, etc. Understanding this Behavioral Data rounds out your clarity on your Target Market. The more information you can obtain, the clearer the Target Market becomes.
You may find that not all your customers fit into the same group. You may have to segregate your customers into different segments with different Customer Personas. This will allow you to personalize marketing strategies and product/service offerings.
Next, develop a Customer Journy Map to better understand the customer experience from the time they become aware of, and interested in, your products/services to the point of purchase and use. Knowing when they drop out of the process or how long they will stay with your service will assist in developing market strategies, your sales funnel, and product/service improvements.
Lastly, monitor market changes. Assuming everything stays the same over time is comforting, but foolish. Market and customer preferences are in a constant state of change. Therefore, you must be prepared to adapt accordingly. Continuously monitoring new competitors, evolving customer expectations, and industry changes. Remain flexible and be prepared to correct the course as needed.
The next blog in the series will address understanding your Competitive Landscape. As we develop a clear picture of the competitive landscape you should be seriously considering your Unique Selling Proposition (USP). Determine what makes you different from your competitors, and it’s not, “We provide great service.” Every business I speak with says they provide great service, but they seldom can explain how that is significantly different, or better, than the competition. So, give this some serious consideration. If you’re struggling to define it, it should challenge you to develop a clear and deliverable differentiator.
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