DARE - Because Entrepreneurs Do

owns a private-label consulting firm that specializes in brand and business strategy.

How important is it to know your customer? and Why?
The customer is a very important entity. All business exists and revolves around this entity. The very purpose of all business is the fulfillment of the needs, wants,

desires and aspirations of this entity. To that extent, the customer is the central focus of all business activity. The customer is the pivot around which all else revolves.

 

The customer therefore needs to be understood. Not only at skin-deep levels, but at levels that are deeper and subliminal even. Most businesses understand customers as numbers and numbers that contribute volumes and value to the enterprise they run. Most companies however do not believe it is important to drill beneath the skin of it all. If you understand your customers well, and in more ways than skin-deep customer understanding, it si a good insulation of your business. You wil be able to predict behavior, predict change and gear up your business to face it all when it happens. Most businesses however don't do this, and get surprised when their customers articulate new needs and gravitate towards new brands, new processes and new vendors. All of a sudden. Understanding customers in depth is a business-insulation process at the macro-level and a business-enhancement process at the micro-level.

What methods can companies use to know their customers better?
There are methods that are soft and hard. The soft methods revolve around observational studies on your customer. What does he do? Where doe she shop? How does he do this? What is he looking for? How satisfied is he with what he has? And more.

Add to this the quantitative techniques of data mining. Understand the numbers in depth and drill them to milk out insight. Watch how the numbers pan out seasonally. See a trend and paint a pattern.

A more holistic method is the scenario planning method of understanding the customer. Here, you paint several scenarios of future-possibility and you traverse down each to build business plans relevant, original and innovative to cater to each possible route.

How good is it to target a niche segment of customers? What are the cons?
Targeting niche customers can be an approach that works in businesses where niches offer the biggest premiums and the biggest value. The pros of this approach is the fact that the entire focus of the business is geared to meet the needs of small sets of focussed customers. Key account management works very well here and delivers. This works best when 80 per cent of the business in category comes from this niche which is a sub-set of the 20 per cent of the market.

Mass categories cannot adopt this approach. Most fo the time such an approach can paint your business int o a corner. A corner in which you are doomed to exist in forever.

How can startups build their brand at low-cost and reach out to their targeted customers?
Branding has two process flows. One is top-down. The second is bottom-up.

Startups would do best to adopt bottom-up approaches. The bottom-up approach is not advertising centric. it is not about mass media domination. It is about dominating niche mediums that work best at the bottom-end. it is about 1:1 selling 1:1 marketing, 1:1 branding and 1:1 PR. It works well when orchestrated as a marketing program with a clear focus and a clear set of deliverables defined.

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