Thursday, January 18, 2007

Know Your Customer, Create Your Success

Know Your Customer, Create Your Success

by Michael Sexton

Good morning, Mr. or Ms. Entrepreneur. I'd like to ask you a very basic question today:

Do you know who your customers are?

That's an interesting question, because there are so many ways to answer it. As an experiment, I asked our Executive Editor Barry Lenson to call three entrepreneurs and ask them that question. Here is what they told Barry:

Entrepreneur #1 answered, "Well, I know who my customers are, but I have never actually spoken to any of them."

Entrepreneur #2 said, "I have spent a lot of money on focus groups that told me what my customers like, and don't like, about my products."

Entrepreneur #3 replied, "My customers are mostly men between the ages of 22 and 25 with incomes between $50,000 and $75,000."

Those are all valid answers. But they are pretty different. Each of them says something different about what it means to know your customers.

But since today is the day after the Martin Luther King Jr. Day, I'd like to position the question a bit differently:

How much do you know about the heritage, religious and racial backgrounds of your customers?

Even today, many business owners know nearly everything about their customers - except about their heritage, religion, ethnicity or race.

Why do you need this extra level of information about the people who buy your products or services? Let me mention just a few reasons that we cover in our course The Marketing Mastery Program.

Having this information:

  • Allows you to market to your customers using highly targeted magazines, radio stations, television networks, Websites and other media. As a result, you get a much higher return on investment for your advertising dollars than you can get from "scattergun" advertising that targets everyone.
  • Lets you cultivate customers in highly affluent customer groups. African-Americans, Asian-Americans, Latino-Americans, South Asian (Pacific Rim) Americans (and gay and lesbian Americans too, for that matter) are gaining economic clout at an accelerating rate. They are starting businesses, investing, buying homes, graduating from college and becoming wealthy at rates that outpace "traditional" white Americans.
  • Brings you greater customer loyalty and repeat business. Many marketing studies report that customer loyalty is disproportionately high in Afro-American, Asian-Americans and Hispanic-American communities. In other words, once you have won customers in these groups, they will remain loyal to you in the long run.

So the bottom line is, you have to dig deeper and really know your customers. To win a level of loyalty that will outpace your competitors, don't leave racial, ethnic or heritage considerations out of your marketing plan.

Michael Sexton is President of Trump University. To learn more about marketing strategically and profitably, enroll in Trump University's Marketing Mastery Program.