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Profiling Your Target Customer

Prepared byRon KnowlesAlgonquin College

& Jennifer Rouse BarbeauCanadore Collegech

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Explore Customer GroupsExplore Customer Groups

Chapter Overview

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Chapter 4 will:

Help you begin collecting information to understand, develop a profile of, and connect with your target customer.

Begin to formulate your market strategy.

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Understand that your key to survival in small business is the target customer.

Recognize three kinds of customer groups.

Use primary and secondary research to profile your target customer.

Match your target customer with what he or she reads, watches, and listens to.

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Learning Opportunities

Become more aware of and start being on the look-out for potential partnerships, alliances, and associations.

Recognize the market and the target customers who are about to surface.

Research your prospective target customers and refine your mission statement.

Visualize your business and target customer.

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Learning Opportunities

What is Customer Relationship Marketing?A Key Trend: Customer Relationship Marketing Customer Relationship Marketing • The development of long-term, mutually beneficial and

cost-effective relationships with your customer.• Emphasizes a market pull strategy:

Determine what your target customer (TC) wants. Profile your target customer. Adapt or create a product or service to satisfy this

want or need.• Emphasizes a one-to-one marketing strategy.

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The Power of Profiling

Three types of customers:

1. 1. Primary: Primary: The primary or target customer is most likely to buy your product or service and could be a heavy user.

2.2. SSecondary: econdary: The secondary customer has a possibility of buying your product or service but needs convincing.

3. 3. Invisible: Invisible: The invisible customer is the one you

don’t anticipate but has a need for your product or service. This customer appears after you open the doors.

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Two Types of Customer Customer ProfilesProfiles1.1. Business to Consumer (B2C) or Business to Consumer (B2C) or

End-User ProfileEnd-User Profile If your TC is the consumer or end-user, your

customer profile will likely require demographics or psychographics.

2. Business-to-Business (B2B) Profile2. Business-to-Business (B2B) Profile Many small businesses offer their services or

products, often on a contract basis, to other businesses.

These supply chain companies need a customer profile that is based on business or company-type information.

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Demographics & Psychographics

DEMOGRAPHICSKey personal characteristics of a group of people. These include: Age Sex Family Status Age of Children Education Residence

PSYCHOGRAPHICSProcess of segmenting the population by lifestyles & values. These may include: Where they eat & shop Sporting activities Entertainment activities How socially & physically active they are Whether they travel for business or fun

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Psychographic ProfilingChances are you will have to do Chances are you will have to do your own psychographic researchyour own psychographic research. .

Use Action Step 24 to get started: What is your VALS? Click on the SRI Consulting

Business Intelligence site.Profile your target customer using postal codes.

Link on to Generation 5.Do your own psychographic profiling. Invite a

few friends to a psychographic party.

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Media Sources Can HelpDemographic & psychographic profiles are available from media sources:

Magazines TV and radio stations Online

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• Analyze media sources aimed at different target markets.

• What does your target customer read, listen to or watch?

• Action Step 25 will help you get started.Conduct primary and “new eyes” research.

• Interview magazine buyers. Do some secondary research.

• Write to advertising departments. • Ask for media kits and reader profiles.

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Media Sources Can Help

B2B:Business to BusinessBusiness-to-business or supply chain firms can be characterized as: Businesses whose target customers are other businesses. Businesses who do not deal directly with the end-user or consumer. Businesses whose major goal is to create partnerships, ventures, alliances, or associations with their target customers.

A target customer A target customer profile profile would include:would include:

Company Profile: e.g. size of business, type of business End user Profile: e.g. end-user application, decision-makerIndustry Profile: e.g. trends, competing firms and barriers to entry.

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Joint Ventures & Strategic Alliances:10 Tips10 Tips

1. Have a common purpose

2. Conduct research

3. Consider mutual benefits

4. Provide a structure

5. Consider potential advantages

6. Invest in human resources

7. Put it in writing

8. Stay in touch

9. Keep tabs

10.Exit stage left

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B2B or B2C

B2B or B2C? Which one will it “B”?B2B or B2C? Which one will it “B”?Recall the experience of Adrienne

Armstrong at Arbour Environmental.

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You can benefit from both worlds.

Field Interviewing & Surveying

Test your TC profile, developed from secondary research, against reality.

Ask questions of your potential customers.

Recall the experience of Julia Gonzales.

FIELD INTERVIEWING TARGET CUSTOMERS

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SURVEYING

Develop a questionnaire & identify a survey location.

Get permission from the location owner. Bargaining tactic: share the information you discover.

Recall the experience of Elizabeth Wood.

Other Sources of Primary ResearchMentoring: Mentoring: Locate a business owner who wants to help.Experience: Experience: Work in a similar business and get all the

information you can.Networking: Networking: Go out and talk to local businesses and

friends.Brainstorming: Brainstorming: Gather a group of friends, associates, or

family and brainstorm your TC.Competitors: Competitors: In some cases, researching your

competition may provide some good information about your potential TC.

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Business Vision

Visualize your new business and the Visualize your new business and the target customer.target customer.

A business vision is:A mental picture of your business, product or

service at some time in the future.A source of guidance and direction.A driving force for your persistence and

passion.

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Chapter 4 helps you prepare Part B of your business plan:

The Market &The Market &The Target CustomerThe Target Customer

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Business Plan Business Plan Building Block

Profile your target market in terms of primary, secondary, and invisible customers.

What do the results of your primary research questionnaire tell you about your target market?

What information have you developed about your target customer from your secondary research?

What characteristics are unique or clearly definable about your target customer?

What is the best way to reach your target market?

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Checklist for Your Business PlanYour Business Plan

My Virtual ModelMy Virtual Model (MVM) is a successful company headed up by Louise Guay and Jean-Francois St-Arnaud.

Answer the Chapter 4 case study questions to learn: How MVM takes advantage of relationship marketing, the

market pull approach and one-to-one marketing. The three types of MVM customers. MVM’s and Lands’ End target customer profile. What MVM’s business vision was and how Louise Guay

used primary research to help start the business. How MVM benefits from market trends and partnerships.

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CaseStudy