You would think this is a simple question with an easy answer. But for most folks, they can’t identify their customer. It seems elusive or undefinable. If you are in business, you need to answer this one question. You need to know. When you know, then you can orient your business to that one single focus and become the business you dream about.
So how do you figure this out? What are the questions to ask yourself and how do you define the customer and move forward?
The first mistake almost all new business entrepreneurs make is setting the product and then hoping to find the customer to fit the product. The reality is it’s the other way around. Define the customer first! Keep asking yourself the same question, who is my customer? Sometimes real life is the best teacher. Here’s a story of defining the customer:
I met this former professional baseball player and he had basically set up a gym with a high school baseball field out back. He wanted to teach baseball to kids. I happen to love baseball and I have two boys ages 14 and 11 that play. It turns out it’s a complicated sport because my sons don’t play on the same size field yet. My friend wants to develop boys into college candidates and he has built his program around that particular concept. When he found out that I was an accountant, he of course asked about 30 questions because he had only been at this for about 2 years. He was losing money and he needed to make a profit. Nobody is going to pay him $70 an hour to teach pitching (his background) and he flat out told me that even if he could charge $200/hour he still couldn’t make enough to cover all the expenses let alone take home a paycheck. So I was intrigued to say the least. After all, I loved the game and I was interested in how do folks make money in this sport. So we talked a few times and I learned something from him.
At first he was interested in teaching baseball; passing his hard earned knowledge onto the boys. Come to find out, a 9 year old boy really doesn’t listen that well. So it didn’t matter that a parent would pay $70 or $200, my friend’s passion for the game wasn’t going to get picked up by a 9 year old boy. What he finally learned from it all was that it was the parent who was passionate. Take note here, you would think the boy was the customer. He’s not! It was the parent. The parent understood what it was it going to take to get a college scholarship. A nine year old boy was only interested in hitting the ball and striking out the batter when it was his turn on the mound. It is going to take years of practice and 2,000 plate appearances to demonstrate true prowess at this game to a college scout.
So my friend has built a program geared to what the parents want. They want a chance for their son to play baseball at the college level. To get there, the boy has to play in high school. To play in high school, the boy has to play in middle school. To play in middle school the boy has to play on a baseball travel team. So my friend creates a travel team program whereby he has 10 years of age levels from age 8 to 17 playing travel baseball. From ages 8 to 12 he has two teams per year in his system. He organizes and plays in baseball tournaments. The parents pay his program a fee each month and he in turn makes sure the boys play ball regularly to get the necessary experience and have a shot at college. He organizes recruiting opportunities for high school ball players during the winter. The parents pay a fee for their sons to come into the gym and try out in front of various college recruiters from several states. Basically a boy has a chance to develop into a college bound player from his system. He uses his professional credentials to make contact with the high school coaches and the college recruiters to provide opportunities to these boys. In effect, the parents pay a monthly fee to him in exchange if the boy works at the sport, he’ll have a chance to play college ball.
My friend has a business whereby the parents pay a monthly membership fee, they pay extra for tournaments, and they pay for special group sessions such as college recruitment. The parents are paying to fulfill their dream. Both of them hope the boy maturates into a ball player and wants to play college ball. It mathematically is unlikely that the 8 year old starting out is going to play college ball. But if the boy has the tenacity and the desire and it still exists at age 16, my friend has a system whereby the boy gets a shot at playing college ball. And that is what the customer wants!
My friend starts his seventh year this spring. He is still in business and he is doing well. This past fall he witnessed several boys that he has worked with sign agreements to go to college and play ball. When you identify the customer and build the product or service to what they want, you are building a business and marketing becomes a lot easier. Act on Knowledge.
If you have any comments or questions, e-mail me at dave (insert the usual ‘at’ symbol) businessecon.org. I would love to hear from you. If interested in my services as an accountant/consultant; click on ‘My Services‘ in the footer of this article.
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I spent 12 Years as a Certified Public Accountant,
Over 20 Years of Practice in Accounting and Consulting,
Controller in Management of Closely Held Operations,
Masters of Science in Accounting,
Prepared over 1,000 Business Tax Returns and Hundreds of Individual Returns