First task for any business: finding customers
Finding qualified customers - people who can benefit from your business' product or service and have the means to purchase it - is the first step in the selling process. Without a steady stream of qualified customers, you cannot stay in business very long.
All businesses lose customers regularly due to moveaways, closings, competitors and other factors beyond their control. Depending on the type of business, this can vary from just a few for a well-established, high-quality professional service business to as many as 20 percent to 30 percent or more each year for those with large customer bases selling commodity-type products in a highly competitive market.
New businesses must first find qualified customers while simultaneously dealing with this natural attrition. As such, finding new customers on a regular basis has to be the core of the marketing section of your business plan.
Before you can look for qualified prospects, you need to define your market so you can create the sales, marketing, and advertising efforts that are focused on your target customers. Many otherwise excellent businesses struggle because they fail to do just that. Understanding what is important to potential customers and knowing everything you can about your competitors and how you are different is all part of defining the market and is critical to this effort. Think your own business is so unique that you don't have any competitors? Trust us, you do; you just haven't figured out who they are yet.
As part of building your customer prospecting plans, every business, whether new or well-established, should be determining as specifically as possible where every, and we do mean every, customer comes from. How did they find out about your business and why did they choose to contact you? Is there one particular product or service that initially brings most
new customers to you? If so, then you'd want to focus your prospecting efforts on that specific product instead of your entire product line.
Some big box stores ask every customer for their zip code so they know where to target what advertising. The discount cards offered by the major grocery chains and retail-store sponsored credit cards are sophisticated ways of doing this. Other businesses proclaim "mention or bring in this ad and receive X percent off your next purchase" in order to try to determine the effectiveness of their media advertising. Still others simply ask who referred you. If you aren't doing this in some form, you are missing out on important information that can help you grow your business.
Next week, we'll discuss the usually most cost-effective way to find new prospective customers and the all important and frequently underestimated "elevator speech."
The next session of SCORE's new six-part Business Plan workshop series will begin Sept. 17 and will be held on six consecutive Wednesdays from 6 to 9 p.m. at the Prescott Adult Center on Rosser Street. Cost of the series is $90 for two participants from a single business. For more information or to pre-register, call the SCORE office at 778-7438.