It is common practice to determine your target customer when developing a business. However, this tunnel vision buyer group mentality leaves money on the table for businesses. To truly optimize profit and revenue a company’s leadership must be well aware of the many buyer groups (purchasers, actual users, and influencers) that can offer opportunity to enter into a new market space with high profit potential.
For example, say you are leather shoe manufacturer who usually focuses on retailers as its main buyer group. Through analysis of your current, similar and alternative products coupled with identifying the pain points of using your product you can realize a low-cost profitable opportunity to reel in your end users; essentially entering into a new market space.
A more effective strategic customer analysis would require you to understand the following:
Why buyers choose to buy your product; aka purchase criteria
What are the factors that cause customers to become angry with your product or company
What are the factors that keep potential customers at bay (you must understand their priorities and create solutions to meet their needs)
The preferences of your customers
The decision making process of your customers
Why they choose to buy at a certain time (holidays, birthday, graduation, et cetera)
Time, travel, hassle and money the customer is willing to pay for buying and using your product or service
What functional needs need to be met
Businesses must also understand what factors motivate buyers to purchase based on price or quality. However, it is imperative that you just focus on the buyer group that has the highest profit potential at a lower cost and your company’s capabilities are able to meet their priorities.
To drive growth and increase revenue a company must understand current and potential customers and identify uncontested opportunity in the industry. Below are a few tricks for driving growth and revenue:
Gather more information from customers that hate you, are apprehensive about you, or don’t know you to identify opportunities to enter into new markets.
Talk to more customers and answer more customer emails.
Have more lunches with customers.
Focus on products, services or solutions currently not being offered in the industry because realizing an opportunity in this aspect will prompt first-to-market revenue opportunities.
Invest in your most profitable products, services or solutions and do away with the ones that erode profitability. For example, Southwest Airlines differentiated itself by not getting into the food business (low-cost business design) like its competitors instead it focused on providing customers with a great experience instead.
Gain strategic dominance in atleast 2 or more of the following (e.g., branding, patent, copyright, value chain control, 2 year product lead, 20% cost advantage, control distribution, supply control, customer information flow, unique organizational culture, et cetera) “The Profit Zone by Adrian Slywotzky”
Stay abreast of industry and customer behavior and purchasing changes for the purpose of redesigning your business design to meet these new demands.