Market analysis is not about calculating how much money a business needs to survive. Understanding the market is about understanding what does and doesn’t currently exist. Knowing the gaps, and how to benefit a customer, is the key to understanding the market. To this end, demographics are helpful.
Understanding an ideal customer can help determine the perfect selling situation. The perfect selling scenario then allows variable tweaking to find potential weak spots. Perhaps these variables start with mild rejections and questions. Basic hurdles can be added, such as “can you bring down the cost any” and “how is this different from the competition”. Start turning up the heat to make the rejections more and more intense. The hope is that this practice can help a business start moving away from the typical scenario with an ideal customer. The real world is rarely ideal and many customers start as cold leads. Cold leads are those customers who know nothing about the company’s product or service. Nurturing cold leads requires attending to the potential questions they may ask.
Selling isn’t the only focus a company needs to have. Knowing the market also means focusing on customer acquisition. To survive, a business needs to know where the market is thriving. Marketing is a way of probing different areas of the market to see how active they are. Each marketing effort should be focused on the demographics of the ideal customer. Ignore the temptation to expand demographics to survive, instead focus on micro-testing easy wins. After identifying easy wins, then expand demographics. The hope is to ensure marketing efforts are bringing the required return plus more. Many marketing efforts are too broad, making them wasted and weak sources of market information.
Listening to the market is more than just understanding where to find customers. A business needs to build and foster a relationship with loyal customers. Many customers are the first source of ideas and innovation for business. Customers help a business focus on bringing more value for a smaller cost. This extra value increases the leverage a business has in solving a need, hence increasing market share. Loyal customers not only want a business to survive, but also thrive. Many loyal customers will act as advocates of the product, telling their friends and family. Fostering a relationship with these people should be the primary goal with any business.
- A business serves customer needs, not vise versa
- Identifying an ideal customer provides a sharper focus
- Quick micro-testing allows an organization to understand where to spend advertising dollars
- Customer retention is often more important than customer acquisition