Know your customers and increase your profits

Everyday, I get asked questions by business owners across this nation about their customers – e.g. who they are, how to get more of them or even how to get them to buy.

These questions are hard for me to answer as I am not a customer of all these companies and these questions usually relate directly to the company’s products or service or directly to its market or industry. But, while I cannot usually answer these questions with specific guidance, there is a very simple and common method in increasing your customer base and ultimately your business profits and that is to know your customers.

If you know your customer these questions would already be answered. Therefore, get to know your customers. If you are afraid to ask your current customers or potential customers questions regarding your business – then, how do you expect to sell to them – to let them know about your business and how your offerings can improve their lives? This is one of the simplest but hardest concepts that business owners face – talking to and getting information from their customers.

But, it is your customers that will ultimately make or break your company. You should understand why customers buy from you (and not from your competitors) or why they buy from your competitors and not you, who else they consider when making their purchase, where they get their information about products in your industry and, most importantly, what need they perceive as being met by your offerings or similar products.

Knowing this critical information about your customers will not only put you above your competitors but will also provide information you need in developing or offering future products and services or even in improving your current products and services. What if you could tweak your current product and double your sales. But, by not knowing your customers and knowing what needs to be tweak – your business will never meet this potential opportunity.

To get this information, you only have to start asking questions. This can be done informally as customers are checking out, browsing around, at trade shows, networking events or visiting your website or it can be done formally with focus groups, mailings/surveys or even customer lead discussions groups.

People like to talk about themselves so provide them the opportunity to do so. If you can pull this off – provide them an opportunity to talk – then you only need to: 1) listen and 2) keeping the conversation near or around your product or company.

While many sales experts will provide advice on what questions to ask and how to structure these questions, I prefer a more informal type conversation as it allows customers to open up more and elaborate further. Plus, informal conversation is much more comfortable (on both sides) than a setting of predetermined, structured questioning – you don’t want this to seem like a police interrogation! Further, formal questions are designed to get specific answers – but, there are times when non-specific answers can lead your business down a new path. A path that you as the business owner might not have ever considered; a path that may be much more profitable than the one you are currently on.

The thing to keep in mind here is understanding why your customer buys from you (how you meet their need better than your competitors’ products) and where they get their information. Thus, you know how to target them both with message and media.

Getting to know your customers means having the tools and information to not only keep them satisfied but to keep them loyal to you as well. Plus, keeping open dialog with your target group will help keep you abreast of the changes happening within your industry as well as the changing needs of your most important assets – your customers. The end result – better understand your customers to better meet their needs and in turn they will help you improve your business and its profits.

Joseph Lizio holds a MBA in Finance and Entrepreneurship, is the founder of Business Money Today, has a strong commercial lending background and is regarded as an expert in business and finance.