Knowing your customer base is an important step in commercializing a new service or product. Without researching your target audience and customer profiles, it can be difficult to determine what market strategies will work best. Learning your target customer is an ongoing and ever-evolving process. As the market changes, so too do customers’ needs and buying preferences.
Do You Know Your Customer Base?
It is surprising how many businesses and business owners lack critical knowledge about their customer base. Many incorrectly assume there is no need to research their target market until a post-revenue phase. This is simply not true. Even in a pre-revenue phase, investors want to see that a business has an in-depth understanding of who their customer base is and why. Without this demonstration of knowledge, it is difficult for investors to develop confidence in the small business concerns ‘ ability to rapidly and successfully commercialize their product.
Researching Target Customers
Much of this research can be done by examining what unmet needs exist in the Industry in which your product lies. Unmet needs represent a problem that numerous consumers have that can be solved by your product. By identifying this unmet need and developing a product to solve it you are well on your way to identifying your customer base.
There is an often overlooked method for gaining valuable information about potential customers – asking them! Customer discovery is an interview and research process geared toward building an understanding of a company’s customer base. By gathering feedback from potential customers, a business can get inside the customer’s head and understand what motivates them to buy and what problems they face with the products and services they currently use. A great way to practice Customer Discovery is through participation in the National Science Foundation iCorps program, an available program for companies to develop their commercialization skills prior to applying for Small Business Innovation Research (SBIR) grants, and a great way to learn about your customer base.
Before you approach investors, both federal and private, be sure you have a complete understanding of who your customer base is and can tailor a marketing and commercialization plan to that specific target audience.
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