One of the hardest things for a small business owner to do is identify the target market: the group of customers he or she is aiming for. Once an entrepreneur understands more about the customer base and why these individuals buy from the company, that information can help with finding new clients.
To grow your target market, take the following six steps:
1. Keep track of customers.
Use a database or customer relationship management system to keep track of regular clients and their purchases. This will help you learn about their preferences to be sure you can provide what they need.
As you get to know customers, keep track of other personal information about them, such as their interests, hobbies and children. Noting these details can help you find ways to start a conversation and find common ground.
2. Ask shoppers how they found the company.
When customers are paying for goods at the cash register, ask how they heard about your business and keep track of what seems to be the most effective method for promoting the company.
Go back to that promotional avenue and advertise again. Then other consumers in your target market will find you, too.
3. Thank regular patrons.
Too often, businesspeople take their regular customers for granted. If you don’t thank clients for their patronage, another new and interesting firm might come along and snatch them away.Thanking your customers can go a long way toward making them feel proud to be affiliated with you and to buy from you.
4. Ask customers if they would be a reference.
Ask your customers this question “How likely is it that you would recommend us to a friend or colleague?” This is called "The Ultimate Question" by Fred Reichheld.
The best way to gauge the efficiency of a company's growth engine is to take the percentage of customers who are promoters and subtract the percentage who are detractors.
This equation is how a net promoter score for a company is calculated. The net promoter score can help an entrepreneur keep track of success in building a strong and loyal customer base.
Notice that the question does not ask, “How likely is it that you would recommend us?” but instead asks, “How likely is it that you would recommend us to a friend or colleague?” If people are willing to refer a business to a friend, they are putting their own reputation on the line.
The thinking here is that if a friend has a bad experience, this will come back to haunt the person giving the referral.
5. Request friend referrals.
If your customers are loyal, and you're satisfied with your net promoter score, this means your current customers will be happy to give you names of people that they think will benefit from using your business.
According to the 2014 Edelman Trust Barometer, you trust “a person like yourself" only just a bit less than an academic expert or a technical expert, especially when you're looking for information on a new company or business. Tap into the interpersonal trust between current customers and prospective ones to find new clients.
6. Thank current buyers for their referrals.
I refer friends to businesses I love and respect quite often. Some of the staff at these businesses are very good about thanking me for my referral and others are not. A thank you can be a simple note or even a referral discount. Over time, I tend to continue to recommend those that notice and thank me for my referral.