Starting a Business

Three Ways to Describe Potential Customers
by Henry McCabe
A blog for businesses with 20 or fewer employees or for people planning on starting one.

In my October 3, 2013 blog I wrote: "Describe for yourself the important characteristics of the consumers or businesses that are likely to buy your product or service because they may have a need for it."  It is to those prospects that you should address your advertising. That is called targeted marketing.  Money and energy spent on promotions  to others is wasted. In order to target likely prospects you need to define who they are so that you can find a way to reach that group in particular. Do this by describing their characteristics. There are three groupings of them: psychology, demography and geography.

1. Psycho-graphics. These are the psychological factors that lead consumers or businesses to make purchase decisions or that influence the decisions they make. The underlying factor is a desire to satisfy a need or want, as described in an earlier post. Expand on that with such factors as: life style- basic or luxurious; desire for prestige, buying habit- impulse or carefully calculated, ethnic background, desire for convenience, style consciousness, infirmity, hobbies, amenable to change or not, fear of wrong decision and so on.

2. Demographics. These are quantifiable factors. The age, gender, place of domicile, vehicle ownership, income level, social class, occupation, educational level and other such facts about consumers. For businesses: industry, location, size of firm, quality requirements, technology needs, and other such facts.  Also, where are they most likely to get they get their information from: TV, periodicals, internet, friends, etc.

2. Geographics. These are obvious but are sometimes overlooked.  It is where the prospects live or do business and make their purchases relative to an area you can profitably serve: local. regional, national or international.

Using these factors you can create a profile of your likely prospects. Then find a way to reach them. Creating such a profile may sound esoteric or complicated but it is relatively simple. Just sit down, make a chart or table and list the best factors you can think of. Here are two examples.

Consumers	Businesses
Age	Industry
Gender	Sales volume
Nationality	No. of employees
Household Size	Profit or non profit
Education	Home based
Occupation	Location based
Income Level	Mobile
Ability to pay	Consumer of product
Special Interest	Re-seller of product
Hobby	Location
Place of Domicile	Source of News
Place of Employment	Computer Literacy
Willingness to travel	Have unmet need
Source of News	Need being met
Source Entertainment	Price sensitivity
Computer Literacy	Formal buying
Have unmet need	Informal buying
Need being met	Frequency of buys
Price sensitivity	Size of buys
Want credit	Competitors
Credit worthiness	Field open
Home value	Want credit
Brand of auto	Credit worthiness
Clothing style	In a network

Planning. The only thing you know for sure about any plan you make is that actual events will turn out to be different. Do not let the attempt to create a perfect plan get in the way of completing one. An imperfect plan is better than none at all.

Definition Quiz. What phrase or sentence describes a customer you want to do n business with?

Answer to last quiz: An Income Statement