If i ask 100 businessmen out there what they want, each one of them will say that they need more customers to grow their business. That’s the number 1 target of each business out there. But before you actively seek out new customers, here are 4 questions you need to ask yourself.
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Question 1 – Am I ready to fight on price?
One of the most common marketing tactics for targeting new customers is to fight on the basis of price. Give better discounts, throw in 1 + 1 product sale or somehow push more customers down the user’s throat. While this is definitely one of the most effective marketing tactics, you have to look at your margins to know whether you can afford it.
Giving discounts means your Bottomline is going to be affected. It is going to be affected because you just cannot slash your prices and expect the customers will come to buy. You have to create point of purchase material, you have to advertise the sale beforehand, there are 10 sundry expenses which will come prior to the sale.
And besides this, if you are planning on targeting new customers, are the customers the ones who will buy your product only when it is on discount? And do you need such customers? These are some pricing related questions you have to ask yourself before targeting new customers.
Question 2 – Are my current customers satisfied?
You have to ask yourself this question before you put money down the drain by advertising your business. It is useless to spend money on advertising; later finding out most of the customers did not convert because of poor word of mouth. As the popular saying goes “Bad news travels faster than wildfire”. So a customer with negative experience is more likely to lose you several customers and more business.
If your customer service is not upto mark, let alone targeting new customers, you are loosing the customers you have in hand. This is for sure because every business out there has a competitor, who is surviving only because of excellent service. Hell, even when I am going on a tour, I go through my selected tour operator only, because of his excellent service and care he takes for his customers. If your current customers are not satisfied or your customer service infrastructure is not up to date, it is better to spend on customer service than acquiring new customers.
Question 3 – Have I listened to my old customers?
Old or new, customers are alike. They want to be happy when they leave your storefront. If you make them happy, they will stick with you. Whether your customers are happy or not, can be answered by your existing customers only.
When they walk in your store, do they feel positive? Is your website up to mark? Do they have any problems while doing business with you? Do you need to tweak the pricing or the product? Is there anything you can do with your existing product arsenal to make the existing customers buy more from you?
You need to make adjustments in your customer and business management to ensure that old customers are not lost or new customers don’t lose their way when they are acquired by your company. Quite probably, before you start targeting new customers, you will find that you already have many customers you can get and retain just by doing things which your old customers recommend!! The sooner you realise this and ask questions from your existing customers, the better will be the future of your company.
Question 4 – Is my business ready?
Is your business ready to take on a sudden influx of customers? If you are thinking of targeting new customers, and you don’t expect a huge conversion, or you are afraid what you will do if too many of them join up, then you need to look at your business readiness.
A year back, a new KFC franchise started in my locality. However, this KFC outlet always received material late from the parent company (packaged KFC food). Even when supplied, the burgers were stale and not always tasty. As a result, the franchise (which is famous world wide) flopped in my locality and McDonalds (which was always fresh) flourished. Similar complaints can be seen on forums for Subway as well as for Monginis or Ribbons or balloons.
If your business is not ready, then you need to expand with caution because uselessly targeting new customers, whom you cannot make happy, will harm your business more than doing good. The people of my locality, who got ill eating the stale fast food, never went to the same franchise again (KFC). This was a sore hit for KFC against McDonalds and it is just a small business lesson for people who plan big things.
Waiting out when your competition is already in the field is harmful, but more harmful is expanding your business when you are just not ready for it. Take your time, expand your business through catering to existing customers, give good customer service, and when you think the time is right and your business is ready, take the plunge towards targeting new customers. Till that time, just wait and improve yourself.
If your answer to all these 4 questions is positive,
a) you can fight on the basis of price or can differentiate yourself
b) Your current customer service is excellent and customers are happy
c) You always listen to your older customers and implement where you feel they are right
d) your business is ready
then it is time for you to step out there, and get as many customers as you can get and have. We wish you all the best for the same.
Liked this post? Check out the complete series on Targeting