Three key questions every entrepreneur should ask about their customers

While there are market tools out there, there's one sure-fire method to get market information

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Who are your customers?

This simple question is often one of the most challenging for most entrepreneurs, says a new venture specialist with Alberta Agriculture and Rural Development.

“Not everyone is a potential customer,” said Christine Anderson. “The more specific you can be in clearly identifying who your ideal or target customer is, and the more you know about what their needs and values are, the better able you are to target your products or service to best meet those needs and drive sales.”

For example, health-conscious consumers are driving the demand for healthy and convenient food options.

“Rather than targeting everyone in your promotional strategy, consider targeting mothers who are shopping for healthy options for school lunches,” said Anderson. “By narrowing down the focus to families with school-age children, you can better tailor your products or services to meet their specific needs. This also includes decisions on packaging, marketing and market channel. For example, your food product would be packaged in a child-appropriate portion, with child-friendly packaging and likely through a retail store.”

Three key questions every entrepreneur should ask about their customers are:

  • Who are they?
  • What do they buy?
  • Why do they buy it?

“Knowing who your customer is includes demographics such as typical age of buyers, their income levels, where they live and work, whether they have children, if they belong to a particular ethnic group and their level of education,” said Anderson. “You will also need to understand the interests, beliefs and values of your customers. Do they value price over quality? Is buying local and supporting sustainable food systems important to them? And finally, you need to ask the question why a customer would be interested in your product or service. What expectations do they have regarding service, convenience, product mix, and price?”

While there are a variety of market research tools — such as published reports and online research — talking to potential customers is often the most effective way to gather market information, she said.

“Meeting your customers face to face provides the opportunity for immediate feedback,” said Anderson. “Farmers’ markets and trade shows are good examples of places to interact with your potential customers, but you can also use online questionnaires or surveys if you have a client database or website.

“Strong sales are driven by emphasizing the benefits that your product or service brings to your customers. If you know the challenges facing them, it’s much easier to offer them solutions.”

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