Growth Strategies

Growing Your Biz by Reaching More Customers

Want to start catering to a new demographic? Here's how.
Magazine Contributor
3 min read

This story appears in the February 2007 issue of Entrepreneur. Subscribe »

When Tiffani Kim noticed female customers of Tiffani Kim Institute Medical.Spa bringing in husbands and boyfriends, she started reaching out to the male market. After renaming men's manicure/pedicure treatments "sports buffs," instituting couples' nights to encourage women to introduce men to the Chicago spa and otherwise exploring the new demographic, Kim, 47, reports that a significant portion of the 80-person company's revenue now comes from men. "It will never be like the women's spa business," Kim says. "But it has gotten to be a good 30 percent of the business." To bring your company's offerings to a new demographic market, consider these tips.

1. Do no harm. "Don't expand in such a way that it's going to get you hurt," says Clarkson University marketing professor Larry Compeau. Appealing to a new demographic requires changing something about your offering. Before doing it, make sure the changes won't alienate the customers who got you where you are. Retail businesses should be especially aware of how a new group of patrons can change the experience for existing customers. Kim clearly had to make sure that having increasing numbers of men in her spa didn't turn it into a boys' club.

2. Look before you leap. "Do your homework first," Compeau urges. "Make sure the new demographic market values your product." Your market research could consist of hiring a research company, talking to potential customers in the demographic group or, as Kim did, just paying attention to what goes on at the front desk.

3. Go slowly. Kim modified her offerings incrementally over a period of years to make sure the effort and risk were worth doing more. That's the way to go, according to Compeau. "I'd advise changing as little as possible at the outset to see how the market responds." The last things to change should be the hardest to undo. You won't know for sure if the new demographic will really be profitable, not to mention whether diluting your offerings will affect profits in other areas, until you try. And you don't want the experiment to be irreversible.

4. Consider multibranding. It's what Toyota does with Lexus and what countless other corporations do with their own brands. Entrepreneurs can reach new demographics without alienating old ones by giving new offerings different identities. It can be as simple as a restaurant using the same kitchen to serve two dining rooms, each with its own entrance, signage, pricing and demographic market, Clarkson says.

5. Look at everything connected with your business and its value proposition to see how it might be modified to enhance its appeal to a different demographic. While it's easy and sensible to do as Kim did and change little more than the label affixed to new offerings, you might need to do more. Look at your pricing, associated services, promotional techniques and even distribution methods. Everyone knows Toyota makes Lexus, but you can't go into a Toyota dealer and buy a Lexus, Compeau notes. The products have completely separate distribution systems, which helps keep them separate in the minds of completely different demographics.

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