Do you know your customers intimately?

There are two main marketing strategies businesses can use to reach their customers effectively. There is mass marketing which refers to treatment of the entire market as a homogeneous group and offering the same marketing mix to all the customers. It allows economies of scale to be realized through mass production, mass distribution and mass communication. The disadvantage of this marketing approach is that customer needs and preferences differ and the uniform offering is unlikely to be viewed as optimal by all customers.

Given the above scenario, if a business needs to fully understand and know their customers, they must adopt the market segmentation approach. It is important to know who your customers are, why they purchase from you and what keeps them buying from you rather than your competitors. Please note that this doesn’t mean you have to know each customer personally, rather you need to know what types of people buy from your business. By types of people, I mean you need to know your customers’ demographic profiles.

Knowing your customers’ profile is known as “market segmentation “by marketers. This mean dividing your customers or entire market into segments or smaller groups that have similar demographic, psychographic and or product usage characteristics. A market segment is a sub-set of a market made up of people or organizations sharing with one or more characteristics that cause them to demand similar products and/or services based on qualities of those products such as price or function. This is very important as it will help you in understanding each segment of your customers better.

Please note that a proper market segment meets all of the following areas: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. Businesses worldwide have adopted market segmentation as a corporate strategy, creating and maintaining detailed customer profiles for each product or service. This information serves as input in strategic decisions and tactical marketing activities, sales, product development, and customer support.

In order to get the best out of market segmentation, it is prudent to engage a professional marketing research company. There are many market segmentation products on the market. You have to select the one you think will best give you the information you are looking for. Please bear in mind that market segmentation is a purely a scientific market research process.

To your success!!!

Will you ever be Rich?

In a recent survey conducted by Princeton Survey Research Associates International, Americans believe its harder to get rich than it used to be. But when asked about the likelihood of getting rich personally, about one-third say it’s very or somewhat likely that they will attain wealth because of their work, investments, inheritance or good luck.

On the other hand, 63% say it’s not too likely or not at all likely they’ll get rich. Just 2% volunteered that they’re already rich. Bankrate.com commissioned Princeton Survey Research Associates International to explore how people feel about their chances for prosperity, as well as how they define wealth and their motivations for pursuing it.

Hope springs eternal –for the young. More than half (54%) of those 18 to 29 believe they will become rich. Meanwhile, reality sets in with the passage of time. Only 34% of respondents in the 30-to-49 age range believe they will be rich, while 21% in the 50-plus age group think so.

culled from Msn.

Methods of getting information from customers

Many business managers think they know what their customers think and want. This feeling is derived from their gut feel which often times is contrary to what is obtainable in the market place. Businesses can not survive and excel  if they don’t meet the needs of their customers. Thats a fact of life.  In order to be relevant and competitive in the modern day market place businesses need to continually look for information which gives them direction with regards to the ever changing consumer needs.

The advent of modern technology brought about a different type of consumer who is sophisticated with many choices at his disposal. This scenario poses a great challenge to any business, as concerted effort is required  to keep in touch with such a hyperactive consumer’s general behavior.

Many companies frown at the mention of information gathering as they think market research budget is a sheer waste of resources. There are several ways companies can use to gather information without spending so much money. Important information about your customers can be gathered from the following sources:

Employees

Your employees interface with your customer on a daily basis. Ask them about products and services that customers are asking for. Also ask them about what the customers complain about. Is it service related or product related. This information will provide a vital platform on which you can start re-engineering your service/product offering.

Customers – Comment Cards

Provide brief, half-page comment cards on which your customers can answer basic questions such as: Were you satisfied with our services? How can we improve on our service offering? Are there any services you would like to see which we are not offering at the moment? Make the comment card very SIMPLE in order to get more responses from customers. You can have maximum 10 questions on the score card, the response should be close-end with the comment are left open in order to solicit qualitative feedback

Analyze internal Records

You can mine data in your sales records to see what customers are buying most across your business. This will provide you with monthly, weekly or bi-monthly trend analysis. With this information you will be able to see where your customers are spending most of their money.

Telephone Surveys

Hire summer students or part-time people for a few days every six months to do telephone surveys with your customers. This provides you with an opportunity to get information about your business from your customers. This information will help you in mitigating service short falls before they become catastrophic.

So there you are. Before you think about spending top dollar in conducting market research, you can start by collecting information internally before engaging an external research agency. It is however, important to note that the above information gathering methods DO NOT SUBSTITUTE an independent survey which can be commission with an external market research agency. It is advisable to do a robust market survey every six months in order to keep abreast with market trends and consumer behaviour.

To your success!!!!

Market research as a black box

Market research is any organized effort to gather information about markets or customers. It is a very important component of business strategy. Market Research is not an isolated discipline – like science or biology. It is a scientific process that marketers use to understand the market place. Market research helps marketers and business leaders to understand their customers, competitors, market dynamics, and other factors that positively or negative affect the business.

Market research information is like any other information; however, market research findings on their own do not really do anything to make a difference. It is the people who use the information who make the information useable. Given this scenario, this clearly shows that market research is a shot in the arm for people who need insights that can help them make decisions that will improve their business. Research provides the roadmap for any business strategy development. It is the voice of the consumer in the board room.

The above description gives a general picture about market research practice. In order to get a full appreciation of this you need to look at market research as a Black Box. Research is about asking questions and getting answers. Questions are your input into the black box. Once you ask a question, you will definitely get an answer. The answer you get is a direct function of the question you ask and your approach in finding the answer. This scenario gives the interviewer a challenge to ensure he/she gets useful answers that will be able to address the marketing problem.

The Question

The questioning should be guided by an understanding of how the information will be used. For instance a company may be planning to expand a product line in order to consolidate their portfolio or maybe they may be planning to launch a completely new product in the market. With adequate background information, a researcher will be guided accordingly during interpretation of the data. There are various questions usually asked in any market research survey. These include questions on general awareness, usage, frequency of purchase, usage and pricing. Depending on the complexity of the survey, other questions may be added to the survey to ensure all important information areas are covered. This is the most important part of any survey as it provides the researcher the opportunity to dig and delve deeper into the target respondent’s psyche and get answers to his marketing problems.

What’s Inside the Black Box?

Experienced marketers don’t rely on the black box to give them the desired answers. They get involved with the mechanics of the Black Box, so that they can get the best out of the whole system – i.e. from question to answer. This involvement helps them to formulate better questions which will help them get valuable output. When the questioning is precise and directed, the data derived from the black box will be decoded in order to come up with useful insights which will help in the transformation of the business.

It is important to note that there are four distinct steps within the Black Box of Market Research:

• Planning and set up

• Implementation

• Field Work

• Analysis

The above steps represent the process of market research from inception to delivery of the research output. Each step has distinct processes which need to be followed religiously in order to get the desired output. Each step is interdependent on the other.

Watch out for my next post ‘ Basics of getting information from customers’.

To your Success!!!!