Start with the customer

The original posting of this article is here.
Be sure to check on the current issue of Explode Your Paradigm here.

In my role as a business consultant I have the opportunity to review numerous business plans. What I enjoy is getting an in-depth look into a wide variety of businesses and meeting some fantastic people in the process. A common denominator is that most owners are extremely passionate about their ideas, they are often technical experts in their field and they are developing a new product or service that they claim is better than all or most of the competition. As part of the plan they often describe how their product or service is better, how they will promote and sell it, how they will price it and what level of market share they will achieve over the first few years on the market. Many plans then dig deeply into specific tactics such as which publications to advertise in, how often ads will be run, when the sales force or outside contractors will be hired to sell their product, how will they be trained, and how much everyone will be paid. They do a good job in describing the marketing mix of product, place, price and promotion but they miss a critical piece.

Many never answer the question who is the target customer and why will they buy your product or service?

“If you build it, he will come” a line from Field of Dreams is often misquoted as “If you build it, they will come.” In real life if you want to develop a product and/or start a business you cannot assume the customer will come. Your customer must be placed in the center of your plan and everything must be built around them.

The GREAT business plans I have reviewed talk about the target customer FIRST!
Who is the customer?
How do you define the customer (age, sex, demographic, income level, likes/dislikes, family status etc)?
What are their needs?
What is a particularly painful need that they need to solve now? Why?
What are they currently using to solve it? Is it working? Why or why not?
Are they willing to pay for something new to solve their problem?
Is the end customer the decision maker or are there other players that make the ultimate “buy” decision. (I.e. if Medicaid (or other third party payer) does not cover your product will the customer buy it?)
How many of them are there? (I.e. how big is the market?)
Where are they located? (I.e. how concentrated is the market?)

Only after a need is established is a solution offered.
What is your product?
What benefit(s) does your product or service deliver that will fulfill your customer’s need(s)?
How do you know it will work?
How do you know your customer will buy or use it? (I.e. have you asked them?)
Who else is critical to the purchase decision? (I.e. your customer may trust their stockbroker to recommend a particular mutual fund to purchase)
How do you inform and influence all customers that are critical to the purchase decision?

Now learn how your customer acquires information, thinks and acts.
How does your customer or customers get their information to support a buying decision?
(I.e. Newspaper, mail, magazines, TV, radio, conversation with a representative of the company, Internet, word of mouth from friends/family)
How does your customer rank the various sources?
How does your customer use the various sources?
(I.e. does your customer use search engines on the Internet to find information or do they go directly to a website? Do they perform their own searches or are searches done by others?)
How much information does a customer need to make a buying decision?
Does your customer want to communicate with you before or after the sale? If yes how will they like to communicate? (Phone, email, online chat etc)
Is your customer willing to tell others about a product/service they find meets their needs? Will they become advocates for your product?
How do they do that? Where will they do that?

Now construct the “story.”
What critical customer needs does your product/service solve?
Why should the customer care?
What is your brand “promise” to the customer?
What things are keeping you from delivering on your brand promise?
How will you overcome these obstacles?

Now write the plan!
Tie the marketing mix (product, place, price and promotion) into what you know about the customer.
What is your message?
How will you deliver your message to the customer?
What tools will you use?
How do you define success?
What metrics other than sales will tell you that you are on target?
What obstacles are you most concerned about? What is your plan for overcoming the obstacles?
What resources do you need to insure success?
What is your plan for acquiring these resources?

Make your plan a great one by starting with the customer. If you don’t know how your customer will respond then take the time and ask. In many cases a small amount of qualitative research should give you the ammunition to justify or modify your assumptions. A solid story will attract the resources and set the stage you need to be successful.

Until next time – all the best!

RolandB