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The importance of identifying your target customer

Why you need to know who you're selling to

Before you can think about selling a product or service, you need to define clearly and understand your customer. It may sound obvious but it is crucial to every aspect of starting up, from writing a business plan, designing a website, and of course trading – and by that we mean selling!

Although it sounds counter-intuitive, you don't want to sell to everyone. This will mean you spread yourself too thinly, when you could be focusing on the people that will be the most valuable customers. A more efficient use of your time will be to focus on the people who will spend the most money with you over the long-term, so you can forget about customers only likely to spend a negligible amount and buy from you only once or twice.

So how do you identify this perfect customer? Do some research. You could use market data, demographic information, industry and trade knowledge to identify who is buying what you're selling.

Look for common characteristics in your key customers or even customers of your competitors. If they're individuals – how old are they? What's their geographical or income demographic? What are their buying patterns? Why do they buy your product or service? Be sure that the target market is big enough for you to achieve enough sales, however.

Even if you're selling business-to-business (B2B), there's still an individual that buys from you, not a company. When you've identified as much information about this target customer, B2B or B2C, as possible, ask yourself questions such as: what problems does this individual have that I can help with? What are their priorities? What information should I be getting from them? Is there a gap in the market of interest to them?

This should help you structure your offering, your sales approach and your marketing to be much more focused and appealing to your most valuable customers.


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