4 Common Customer Targeting Mistakes Made By New Small Businesses
Starting your own small business allows you to enjoy the freedom of being your own boss, but it also puts all the responsibility of securing a customer base on your shoulders. Before you can develop a product or service that will pay your bills, you need to identify the customers you want to target. Watch out for these four customer base targeting mistakes most small businesses make and work with a small business startup trainer like CJC Financial Resource Services to stay on the right track from the beginning.
It's a nice concept that everyone from a great-grandma to a toddler will want and need your product, but it's pretty much never true. Every product and service has a group, or multiple groups, of people that are most likely to spend money on it. Failing to identify any demographics to market towards and aiming to bring in everyone as a customer will only leave you floundering within the first weeks and months of running your business.
Misunderstanding Customer Data
Once you've made a few sales, you can check out the data on your customer base to figure out how to market your business in the future. Unfortunately, inexperienced business owners often focus on the wrong customer traits when deciding who to target or how to engage them. For example, many small business owners focus on targeting customers who left a positive review or good feedback on the product assuming they'll be most likely to buy again. However, hard data proves that former purchasing habits are a more valuable metric to judge customers by, not their attitudes towards your company or another demographic.
Focusing on Conversions
It's true that when you're proposing something radically new, you'll need to do a little extra explaining to win over customers who are completely unfamiliar with your ideas. However, don't waste too many resources going after customers that need a lot of conversion when there are likely groups of customers that are easier to win over. Focusing too much on converting non-customers into customers can cause you to lose the base you're already developing, even when it's only a handful of people. Balancing your efforts between conversion and maintenance of the existing base will grow your numbers without causing you to lose established fans.
Tightening Down Too Much
You'll find plenty of resources advising you to focus on very specific niche customer markets, but this can backfire when you're starting a small business. Don't go overboard in identifying your target market and end up only appealing to a few dozen people scattered around the globe. A good customer profile should match thousands of people, even if you only need a few clients to succeed, so that you have a large enough pool of potential customers to draw from as you grow.