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5 Must-Answer Questions to Succeed Targeting Your Customer Base To be an effective marketer, you must know as much about your customer base as possible.

By Mike Kappel Edited by Jessica Thomas

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


Marketing 101 is all about a little thing called "segmentation." It's not enough to say you sell your product to humans. You need to know as much about those humans as you possibly can. Specifically, what parts of their humanity correlate well with the purchase of your product or service.

For example, if you sell luxury cars, you know that only a certain segment of the population actually makes enough to be able to afford one of your luxurious automobiles. Where do these affluent humans live? When do they like to shop? Why do they like to shop? What kind of media do they consume (so you can advertise to them effectively)? You might need to do a business market analysis to find the most appropriate customer segment.

1. Who are your customers or potential customers?

To segment humans into potential customers, create a profile of who your target customer base is. Be as detailed as you can be. This helps you recognize present customers and new customers.

It can be difficult to answer all of the deep questions about your customer if you don't have access to a lot of marketing data, and many small business owners don't. Not to worry. Instead of detailed marketing metrics, you can simply profile yourself (assuming you're creating a product or service you would purchase). Or, you can do a profile on some of your early customers by asking them to take a few sample surveys or quizzes. You can also profile the customers of similar businesses, or customers of other businesses that complement your own. Once you have this information, extrapolate what you've learned.

Related: 6 Ways to Get a Fanatical Customer Base

2. What motivates your target customer base?

What triggers the members of your customer base to purchase what you're selling? Some of you may be inclined to respond, "Well, Mike, if I knew that, I wouldn't need to read this silly list." True, but, there is a difference between knowing what gets a customer to buy and knowing when that customer will be in that "what" situation.

If you sell a staple good, like milk or bread or diapers, you "know" your potential customer will be motivated to pull their purchase trigger often, maybe once a week, and usually in a convenient location that fits into their daily routine. That tells you a lot, doesn't it? Some of your findings may even point to opening a new business location.

If you sell an experiential good, like luxury cruise vacation packages, a very different type of event has to occur in order to make your potential customer squeeze their purchase trigger. Perhaps they're stressed and need a break, or they're planning a honeymoon. At what point in a customer's routine does your luxury package fit?

And, while a customer purchasing a staple good may want to eat or use the item immediately after they purchase it, other goods, like cruises, could get bought years before they're "consumed."

What is motivating your target customer base? Which of their needs does your product or service meet, and at what point will it meet that need during a customer's life? What external circumstances have to happen? How can you be there when they need your product or service?

Related: To Grow Your Customer Base Focus on EOA: Early, Often and Always

3. Are they repeat, steady or one-time customers?

Are you providing continuous services for your customer? Are you setting up a recurring revenue model where you bill your customer once a month, like a cell phone plan, or a software as a service product? Do you expect to sell the latest version of your good or service each year, like version 1.0, then 2.0, etc. to your target customer? Are you offering a once-every-30-years product, like a new roof, or basement seal?

Knowing how often you expect a customer to buy will help you calculate how many customers you need to stay solvent, what kind of inventory you need to keep on hand, and what kind of marketing expenses you should anticipate.

4. Where will your growth come from?

If you think selling to your friends and family is enough to keep the net revenue floating in for the long haul, think again. Depending on what kind of business you plan to run, you need a steady stream of new customers coming in, which means you need to know where you're going to find them. With a little bit of thought and research, you can reap the benefits of a business plan structured around the following questions: Do you plan to run a referral-based business, or will you engage a full marketing campaign? What's the population size of your business's locality? Can it support your growth? If not, where will you go to chase your growth goals? Will your business idea will work well now, but burn out in three years' time?

Related: 3 Strategies That Show How Perch Doubled Its Customer Base in a Month

5. How will you differentiate yourself?

Do you plan to compete on cost, value, or a combination of the two?

Even if you were the only person to be offering your product, you wouldn't be for very long. In an open economy like ours, a good idea is quickly imitated, meaning there will be competition in the market or arriving soon. When competition happens, you need to know what makes you different, and why that difference is relevant to the customer. Have you figured out how to price a product more competitively than the next guy? Do you offer them a superior value? Or a combination of both for a better experience? Depending on the specific good, there is a market for all of the above. It's your job to know that market, and how you fit into it.

Mike Kappel

Entrepreneur Leadership Network® VIP

Serial Entrepreneur, Patriot Software Company CEO

Mike Kappel is a serial entrepreneur and the founder and CEO of Patriot Software Company and its subsidiaries. Patriot Software offers accounting and payroll software for American businesses and their accountants.

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