A Comprehensive Look At Who Your Customers Are
What are customers? A customer is the recipient of a product, service or idea from a seller via an exchange of value (usually money)
Customers come in many different forms and contexts.
Are customers the person in line at the supermarket with a trolley full of food? Is it the person who just added a new pair of shoes to their online shopping cart? Is it the person who just visited the company website?
In this article, I will explore the ‘customer’ and all its associated business lingo and tie it all together into a useful framework.
First, we need to understand why someone becomes a customer.
Long before someone becomes a customer of a business, they face a challenge or a problem. That problem will grow big enough to motivate that person to find a solution somewhere along the way.
Each ‘customer’ goes through different stages of this problem recognition process. They start as a person not aware of a problem and end up a customer purchasing a solution.
I found this framework from ‘The four steps to the Epiphany’ helpful. There are four steps each customer goes through.
1. Hidden problem – Customer has a problem, but they are not aware of it yet.
2. Passive problem – Customer knows they have a problem but aren’t motivated to solve it yet.
3. Nagging problem – Customer recognises a problem and is searching for a solution.
4. Solution search – Customers had an idea for solving the problem and attempted to create this solution themselves.
Customers also have a type.
The person that decides to buy is not always the purchaser, and the purchaser is not always the end-user.
So knowing who your customers require you to understand the different types of customers, you might be serving.
• END USERS – These are the customers that use our product or service. They push the buttons, enjoy the flavours. They are the consumers.
• INFLUENCERS – Often, the biggest ‘influence’ on a customers’ buying decision comes from someone else (not the business sales rep).
○ In every market, there is a group of ‘leaders’ that cultivate the trends and opinions of the majority. They influence ‘popular culture.’ Generally, these people don’t have direct contact with the customer but influence from afar through media and attention.
○ Think ‘Kim Kardashian’ and the likes.
• RECOMMENDERS – These people are slightly different from influencers. Rather than changing culture and people’s behaviour through their audience. Recommenders explicitly recommend products to their audiences, otherwise known as word of mouth.
○ Recommenders are the personal trainer who recommends XYZ protein or your real estate agent that recommends XYZ mortgage broker.
• MONEY MAKERS – These people often go unconsidered in the buying process. They control the money. They are the managers who set budgets, parents who set allowances, partners who manage the credit cards, etc.
• DECISION MAKERS – These are the people who make the purchasing decision. Again they are not necessarily the end-user, but they decide whether to buy or not.
○ These people are your Mum’s, Dad’s, Partners, and Bosses.
There are also different groups of people that are the same customer type.
These group differences are ‘customer segments.’
The ‘segment’ is the variable we use to differentiate between different groups of people.
For example, we could select 100 end-users of our product and segment them by their age. Each group of people with a different age would be considered a separate ‘segment.’
There are four different types of variables we can use to segment our customer types.
1. DEMOGRAPHICS – Demographics refer to socio-economic information about a person or, in our case, a customer. Some simple examples of demographics are Age, Income, Gender, Marital Status.
2. PSYCHOGRAPHICS – Psychographics focus on qualitative measures of a person’s psychology. These look at traits like Interests, hobbies, opinions, values and beliefs.
Pychographics offer a more personal approach to customer segmentation and provide a deeper understanding of our customers.
3. GEOGRAPHIC – Geographics relate to where the customers live, work, travel to, etc.
Geographics look at varying degrees of detail about a location that a customer completes a job. This could be by Country, Province, City, or Neighbourhood.
4. BEHAVIORAL – Behaviors looks at how people ‘behave.’ As people and customers go about their day, they will carry out specific behaviours that we can use to identify them.
Generally, these refer to the way someone completes a job or activity. For example, when reading a book. Some people speed read while others are slow and methodical. Some of us only read during the weekends while others read during their lunch breaks.
Customer Archetypes explore our customers in more detail.
They provide a narrative about our customers. They combine our customer segments into a detailed but generic description of a person.
We already have many of these formed in our minds. “a-List celebrity,” “basketballer,” “socialites,” “rugby player,” “politician’. Customer archetypes should express who our stereotypical customers are.
USING THE CUSTOMER FUNNEL
Now that we understand all the customer jargon. We can use a simple framework to tie this together, called the customer funnel.
1. Problem Recognition
2. Customer Types
3. Customer Segments
4. Customer Archetypes
As we move down each step of the funnel, we are zooming in on our ‘customer.’
Let’s say the marketing department at my gym is looking to create a new social media campaign targeting high school students.
To create their campaign, the marketing department needs to understand who the customer is and what messaging and targeting to use.
Using the customer funnel, we can quickly zoom in on their target customer.
1. Problem Recognition. What stage of problem recognition are they? Given we will target high school students, most of these ‘customers’ will be facing a ‘hidden problem.’
2. Customer Type. What customer type are they? Again we are targeting high school students who will need their parent’s permission and money to join a gym. So we have two types of customers, both the end-user and the decision-maker.
3. Customer Segment. What are our customer segments? Given we are marketing to parents of high school students, we would identify relevant segments that we believe these parents would fall into, such as; age, income, location, values and behaviours. Here we would try to identify segments of active parents who believe in prioritising health and well-being for their kids.
4. Customer Archetype. Who is this customer? What is their archetype? Now we would merge all our segments and form a model of this customer.
As you can see, by working through the customer funnel, archetypes we can provide our marketing department with a detailed description of the ‘customer’ we want them to create a campaign for.
You’ve got to know your customers to know your business.