Most people glance at their data, glean the surface of it, and then call it a day. They have X number of visitors and X number of sales and that’s enough of that. If you want to target your market, then you’ve got to dig deeper. According to Michelangelo, “Every block of stone has a statue inside it and it is the task of the sculptor to discover it.” I say, all that data has a picture of your profitable customers inside it and it is your task to mine away until you find it.
You see, there are three basic types of customers for every business: the profitable customers that generate the bulk of your profits, the regular customers that generate the bulk of your revenues, and the unprofitable customers that cost more to serve than they actually pay. By analyzing your data, you can learn more about each of these customers and start uncovering what they look like for your business. First, you have to know what to do with all that data you’ve collected, so let’s get started!
1. Look for patterns
If you’ve collected enough data and you put the same kinds of data into data sets or groups, you’ll discover that most data sets reveal at least one pattern and they often reveal more. For example, if you track your customer traffic every day for a month, you may find that more customers come in on Thursdays than any other day of the week. If those customers come in steadily, not in rushes, then this pattern may surprise you. Look for patterns in your data and try to assign meaning to the patterns you find.
2. Compare your chickens and your eggs
Which comes first, the chicken or the egg? Your chickens are your marketing attempts—blog posts, advertisements, newsletters, flyers, promos, etc.—and your eggs are your visitors (unfertilized) and sales (fertilized). Chickens will be found in one data set and eggs will be in another. Each of these data sets can be broken down into multiple groups. Your job is to put them together as completely as possible. For example, if you learn that your ad bombed when it came to sales, but your newsletter brought in a lot of customers and got them buying, then you know that the newsletter was more valuable than the ad. Who gets that newsletter? Which of them came in and which of those bought something? If you put the patterns together, you can figure this out.
3. Create a Top 10
Again, you’re looking for patterns, but this time you’re putting whatever data you have together to find out the who’s who of your customers. Make a game of it. Your job is to create a Top 10 list of your best (current) customers. As you sort through your data, you’ll add contenders and bump people off. Keep sorting until you have a solid Top 10 you’re confident are the real deal. Beware, however, that this isn’t just about sales volume or sales frequency or even total sales value. You have to factor in how much it costs you to serve these customers, too.
4. Zone out
Once you have your Top 10, it’s time to stop thinking about them as individual customers. Zone out and focus on the commonalities. Did they come from the same source(s)? Do they have similar attributes, like financial bracket, family/business size, or interests? Are they the same age, gender, race, or profession? What distinguishes these customers from other customers? If you’re having trouble, do a little word association, some brainstorming, or some mind mapping. Go over the data again if you get stuck.
5. Zoom in
Once you’ve found the thing(s) that tie these customers together, zoom in on those traits, attributes, or aspects and create a picture—paint it with words if that’s your strong suit—of your ideal, most-profitable customer. This isn’t a fanciful exercise. You’re basing it on data, but you’re not leaving that data in its static form. You’re putting together the data you have and the data you’ve processed. Then, you’re making it mean something. So, focus: What makes these customers special to you? If you put it together, what does this could-be customer look like? How do you reach them? What do you say? Use your data to figure out what the ideal customer wants from you.
There are myriad ways to move down this list—replacing different actions for each of the tips listed above—and it all comes back to the same end result: a clear picture of things that matter when considering your ideal customers. These five activities are easy to implement with or without technological assistance. But it takes work, it takes thought, and it takes time. Reflection is a big part of smart business decisions. Make the time to reflect on and identify your ideal customer. If you do, you’re well on your way to profiling your customers, which is the next step in the targeted marketing process.
Read our first blog in this series: 5X5: The 5 Steps of Target Marketing
Read our next blog in this series: 5X5: 5 Tips for Profiling Your Customers