How to Identify Your Core Customer Base?
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So your company has decided to find out who their core customers are and entrusted you with the daunting task to identify that group? Worry not! SurveyCrest is ever there at your disposal to help you find the exact information you require.
If done correctly, this action can generate a lot of business for the company. However, an unsuccessful attempt at identifying core customers may result in a dispute among various members of the organization about who knows the customers well and fingers will be raised at the person who wasted company resources in conducting a failed research.
Problem is, most of us are simply unaware of the process of undertaking a fruitful research of the core customer group. Many people start the project by creating a survey which is wrong. A survey can be useful to assess your core customers but not to identify them. If the responsibility of finding the main customers is yours, here is our guide to help you out.
1. Data Gathering Comes First
First things first (and that’s not a survey!), you need to understand your whole clientele, and who among them, are the most valued and why. You need to remind yourself of all the things you already know about them – their occupation, tendencies, etc.
Most companies rate a customer valued after he has spent a significant amount of money on their products. If your company works the same way, there are no issues. This way, it would be rather easy to track down those customers but before you pay a visit to your finance department, it’s probably best to consider a few more things and see where else you need the information from.
• Average Purchase Value
You need to pinpoint how much each of their transaction is worth for your company. If their single purchases value less than what it costs to sell them your prodcut than it’s probably a good idea to not include them in your list of the most valued customers.
• Long-term Value Earned
This point includes the details of how much monetary gain you have accomplished from a valued client over a period of time; preferably, over the entire time your company has had contact with him.
• Need for Support
You need to analyze if your valued customers are those who often need your training and support. How much does it cost to provide it to them? Compare the money spent on their support with the amount earned through them.
• Business Mission Alignment
You should be pretty clear about what type of clients you want to target and whether your special customers are exactly who you want your special customers to be. If you want to serve industrial sector and most of your customers tend to be household customers then that indicates a misalignment.
Since the task in itself is too extensive, it’s better to just be direct with all departments of your organization and tell them exactly what information you will be needing and why. Once you are handed over the relevant information, it’s time to put it all together and point out the emerging patterns which may help you understand the clients better.
2. Customer Distribution As Per Their Value
Once you have put all gathered information at one place, it’s time to classify your customers as per their value to the company. The task requires exceptional understanding of statistical concepts of data processing. For this you can her hire a data consultant or do it yourself if you are able to understand the firmographic, geographic, demographic, ethnographic, and psychographic aspects of your business audience.
This means that you will be looking for a bunch of groups of customers of varying values, clustered on the basis of a variety of factors. At this stage, you are free to number or name them generically. Please refrain from categorizing them on the basis of merit or psychographics, etc. or it will affect your progress on the next level when you will be interviewing samples from each group.
3. Qualitative Analyses
You don’t just need statistical data about your customers. What you really need is the background information on the factors that affect their buying tendencies, motivation, and overall behavior as a customer. This practice will help greatly in pinpointing the core customer group, which is, after all, the whole purpose of this exercise. This will narrow down your focus to only the customers of most value to the company so that the company, in turn, can center most of its resources efficiently in the right direction.
For starters, you need to call a sample from each group to learn about them. Be courteous and ask them questions about their experience as a person, even if you talk to them on a business to business level. As you move further, you will realize a number of similarities within or between various groups. For example, they could all be roughly categorized in the same age group or the majority might be from a certain background.
Confirm your evaluations with another round of interviews until you are sure how each group differs from the other. Keep a record of your findings with all the details you will need further down the road while building client personas of your most valuable customers.
4. Quantitative Analyses
You would probably feel like you know your core customers inside out by then when you wouldn’t even have met them in real life. You have done so much hard work in collecting all the info that you are either just ready to give up or even more determined to finish the job and enjoy the result. Don’t sit back and relax. You’ve still got work to do!
You have gathered information which gives you a good idea of who’s who and what is what, but it doesn’t give you a Polaroid image. You need to be certain of the valuable data which would become valueless otherwise.
Even if you think that have successfully identified the core customer base for your company, you will need to scrutinize the market rather scrupulously. How does the market treat your customer? How can your customer help you in the market? Will your company profit by focusing on those customers?
After assessing the accuracy of your assumptions and scrutinizing the market, you need to create a survey focusing on these two points. It’s usually a good idea top survey a sample that is not already your client. If you turn out to be at fault with some of your assumptions, that’s all right. See how it alters your definition of the valued clients. Besides, you can always go back to the qualitative analysis stage and interview some more questions.
5. Creating Customer Personas
You deserve a pat on your back! After completing all the stages of collecting data, categorization, and qualitative/quantitative analyses, you are definitely one of the most eligible employees in your company who could authentically comment on the needs of their customers.
The biggest challenge now is to communicate what you know with the rest of the organization and bring everyone on the same page. That’s where creating customer personas come into play.
Customer personas work when you take the personality of each core customer group and create a fictional character to represent each. The persona should be realistic enough (with a name and details) to convince everyone in the organization to treat it as one of the real customers or colleagues. If you fail in achieving that effect, all your hard work of collecting data will go down the drain as no one else in the organization would develop an understanding of the core customers.
The ability to understand the core clients and core market is invaluable for any kind of business. Therefore, it should be practiced regularly by every organization. You need to follow the core customer and your own efficiency to adapt to the market accordingly. Also, even when you have identified the valuable customers, keep your options open for new opportunities. Moreover, your research might lead you to a new potential client base that might expand your scope of business in the market.