Know them and you will be better off

By Muhammad Atif Kauser
Apr 03 - 09, 2000

With the world becoming more competitive and the customers becoming more aware of the intricate details of what is happening around them, it has become imperative for any organization to know its customer, understand its customer and above all, satisfy its customer. This is the only way to ensure success. No matter what the size of the company, it needs to know its customers; and know them well. Had this factor not been this important, big companies would never have had such large market research budgets which they spend every year. They spend a lot to ensure that they know What and Why and When and Where and Who and How of their customer base.

5 "W's" & "H" OF YOUR CUSTOMER

What: If you ask a seller what customers are buying, he would characterizes it as what customers are buying as goods and services, e.g. toothpaste, shampoo, cars etc. The point which should differ in understanding 'what' of the customers at your end should be the realization of the fact that customers are actually purchasing benefits as well as products.

What needs to be underst and here is the fact that you need to know the customers point of view, what they are buying. You need to know the reason for buying decision of the customers. Mostly common names of products mean very little to the customers, just as the chemical names on the label of a proprietary drug mean to any patient. What a sick person really wants is a safe and quick relief.

Once you have understood your customer, you then do not produce a product for them. What you actually deliver to them is satisfaction, and that is where you start enjoying a competitive advantage and better profitability. All the successful manufacturers and service establishments produce benefits for which customers are willing to pay; they are driven by the customer demand and requirement.

When: A manufacturer should always ensure that he is able to make the product available when the customer wants it, or else an irreparable damage can be caused. Customers buy when they want a product and have the time and money to purchase it. Thus we need to study the buying patterns of the customers. Purchase decisions are always dependent on various factors and occasions of life. Occasions like marriage, buying a house, illness, and other activities are such factors that affect your buying patterns.

Good retailers always keep a track of such key events and always adopt selling strategies accordingly. Seasonal factors like holidays and weather changes also affect the buying behaviour of the customers and the retailers should adjust themselves according to them. Other occasions that come regularly and are known to fall during the course of the year include start of the school year, introduction of new models and clearance of old ones etc. These can be planned before hand and do depict the trends of the customers.

With the changing trends, we see more people in a household going out to work. This has considerably changed the behaviour of the consumer group. The buying times of customers have changed and people are only able to go for shopping during the off hours or on holidays. Although many businesses need to adjust according to this change and make sure they are able to deliver as per requirements of the customers. That is the reason why you find outlets open very late; even after midnight.

Why: A customer will always have a logical reason for buying something. It is important to ensure that you understand the customer's taste. Donít argue with the customers on their tastes and preferences and try to understand the customer's logic of buying something.

Each person has unique behaviours and habits. Even the identical twins have different habits and attitudes. Every person is subject to different scenarios and pressures and has different criteria of assessment. In addition to this, every one has a different perception that guides his behaviour. What is required of a good businessman is the understanding of these buying logics of different customers and then serving them accordingly.

It is a difficult job to find out the reason why customers buy a specific item. Some people have the tendency of hiding their true motivation of buying a particular item. At times it so happens that the consumers are also not sure why they buy or purchase a particular item.

Most of the times purchase decisions are a resultant factor of many causes. It also happens that the decisions are subject to a lot of conflicts. A person who is out to buy a car wants the roominess of a large vehicle, but also requires the car to be fuel-efficient. In such situations it is usually very difficult to determine a plausible solution. What might happen is that customer has to settle for one feature and forego the other.

At times the reason for purchase is very petty. If customers are indifferent toward a product or store, the selection is usually a result of a coincidence. It can be so that the requirements of the customer are fulfilled by more than one product available in the market. Resultant decision might not take into consideration some minor details and at times the reason for buying a particular item could be a very small thing that could never have been a concern for the manufacturer. Thus we need to pay attention to every possible detail in a product for they can be crucial to customers.

Although it is important to pay attention to what people say, it is more important to notice and register what people do. In addition to finding out reasons for which people buy, it is more helpful to notice why old customers shifted from your product to the product of another company and why are they not returning to you. It is very important to note and find out why this hindrance occurred and has not been removed. It is imperative that you should be careful in retaining your regular customers. No act of business should offend the present customer base and in no manner should it give them a reason to switch.

Where: A very major trend that prevails in the market is that most of the stores usually draw their patronage from their neighbourhood and close vicinity. The traffic in the stores should be regularly checked and their suggestions should be noted in order to ascertain the type of customers that usually shop in the stores.

A very useful way of doing this is regularly strolling in the store to have informal discussion with the people shopping around in different sections. This gives a first hand idea about the feelings of the customers and their attitudes and is very helpful in improving the store. Stores often take help from placing a suggestions box in the store. This informal communication is also a source of the knowing the customers feelings about your stores. They are an excellent guide for making store policies more friendly for the customers, thereby attracting more traffic.

Customer influences are of varied nature. They are dependent on the type of product, type of store, and the characteristics of the consumers visiting that store. Some visit the shop for the only reason that it is close to their home whereas others give their patronage because they find everything under the same roof. You may find a consumer group regularly visiting the store for the reason that the store offers better prices whereas other consumers prefer quality and do not consider price as the deciding element. Others may be there for the reason that the store has a good reputation and is considered to be a status symbol.

What is needed definitely is telling the customers that the goods and services they require are available at the store, and advertising helps in passing this information forward. Word of mouth again is a good source of spreading the news around but for this you have to ensure that you care for customer satisfaction.

Customers are also attracted by the physical lay out of the stores. This can be a source of inviting customers and can also be a cause of keeping the people away from the store. Customers thus perceive a mix of tangible and intangible factors that combine to form the environment of the store which resultantly invite customers or keep them away.

Who: It is very important to identify your customers. This lets you develop an effective targeting campaign and make it more effective. Some business owners are proud of the fact that they know their customers personally. This indeed is a source of keeping the customers intact because this lets them feel at home. In the industrial field and big businesses, employees need to have personal relations with as much customers as possible because knowing each one individually is not possible. In this case what is advisable is that your behaviour should be such that everyone who comes across you, remembers you.

Different companies have different strategies and they would vary for every customer. A firm might find it feasible to concentrate one segment whereas another firm may need to attract more segments. It might prove expensive, but the having different policies for different segments can be profitable, but this again needs to be assessed.

How: It is very important to know how customers buy. It is a whole long process and is influenced by various factors. Each purchase is backed by a need; and the need may be the satisfaction of personal drive of buying. The need triggers the whole process and the customer indulges into the process of purchase for procuring an item; it may be for personal use or official use.

Every person / firm has a discreet buying behaviour and is also dependent on the importance and requirement of the product in that situation / premise. There are various factors that can influence the buying behaviour; an important factor amongst these is the peer group. A consumer may feel the need of buying a new television because some one amongst his peer group has bought one. Not to mention that it is very important for the manufacturers to make sure that they exist in the media to make the people aware of the fact that they have a product that can satisfy their needs; being at the right place at the right time is the principle that applies to this situation. Here also, the word of mouth plays an important role to make the people aware about you. A satisfied customer will always talk to other people, and talk good about you and it is an ongoing process.

Preemptive attitude is always good. If you are ready to meet the customer requirements the moment they arise, you are always at the better end and enjoy a good reputation amongst the people. Thus, be sharp enough to prepare for rainy days of the customers.

This one is particularly for retailers. With the changing global trends and the swift media operations, people have become more aware of what is going around in the world. The distances are not an excuse for any one and this has lead to the fact that people want a variety of items to choose from. Keep a variety of stocks to make sure that you attract a lot of traffic.

All these factors are very important in knowing the customer. They let you know how the customers react in various situations and what they expect. In addition, these factors are a source of identifying the needs of various sectors of the customers and hence are a source of forming a basis for market segmentation. You can be more sure when you decide about segmenting the market as these factors allow you to segment the customer market according to various preferences. No matter what type of business you are in, these players defined above are very important in making you more prosperous; it is just a matter of recognizing them and making your work plans accordingly.