Azeez started his business (Toyota repairs and servicing). All set, nice location, nice apartment for the business, 2 mechanics etc. 6 months have passed and nobody came around to patronize him.
Mrs Okoro came with a Volvo, saying that she will pay as high as the service charge of Toyota since she needs someone she can trust. Should Azeez accept this offer?
Before you give your opinion, you need to remember something as an entrepreneur – Focus. On what? – Who your customers really are.
This article aims to explain who your customers are as a business person, how to identify them, and the difference between a customer, client and the end user.
Mrs Okoro is ready to pay cash but should Azeez go with this one customer or few? Is she Azeez’s customer?
The fundamental business of business is to get paying customers. It is the single, necessary and sufficient condition for any business. If you don’t have a paying customer, you don’t have a business.
Questions To Help You Identify Your Customer
What is the problem your business wants to solve?
Who experiences that problem?
How do you want to solve that problem?
Why is your solution a better one?
Having a deep understanding of the above questions gives you a clear view of who your customers are.
You should know the difference between a Client, a customer and an end user
A customer pays for your product or service. An end user is a person who uses your product or service. How explanatory is that?
Let’s take the IT industry as an example where millions of softwares have been developed to solve problems.
A client is a person or corporate body for whom a product is developed and sold to. A software is a product made to satisfy directly, the needs of some group of people (clients most especially and customers).
A client is a person who orders for that specific software or product that has specific features depending on his requirements to the developer and getting it after development.
A customer on the other hand can be any person who can buy the same product, it may be with some variations or no variations and pays for that product when it is ready.
A customer just visits the market and gets the ready-made software according to how pleasing and satisfying the software or product is to his requirements.
An end user can be any person or group that uses the software or product once it is sold to the clients or customers in their domain. Here you will notice that an end user exists both the client or customer base.
To identify your customers, you need to:
Shun obsession with your own idea or product.
The IKEA effect holds that: when you make something yourself (creating a business, a product, material or service), you tend to value it way more than you should.
As soon as we build something, we all tend to move increasingly from inquiry mode to advocacy mode at the very time where the former is needed and the later blinds us.
You must view your product or service from the customers’ eye. Your idea must attract paying customers. It is what customers see as value that is value.
You need to learn about customers’ needs and to attract new customers also, you must know that customers need a product or service that solves their problem, something that gives them satisfaction.
You just can’t build a product without a well-defined customer. You need to focus on the ‘why’ question before the ‘what’ and ‘how’
Why is Azeez starting the Toyota repair and servicing business and not Hyundai? He definitely wants to solve problems related to Toyota automobiles. Then he found out how to get those problems solved.
Here, Azeez needs to target a specific audience out of many other similar ones who may have interest in his product or service.
The China syndrome – High level cloud
China has a population of over a billion people. If I sell to just 0.1% of my product, I’ll be in money. That’s just big numbers entrepreneurs think about and not identifying and understanding who their customers are.
If not careful, Azeez will fall victim of the China syndrome (i.e driven by high level cloud transaction).
You need to pick customers and understandingly solve their problems really well and not be distracted by other people.
Specificity is clarity of who your customer is, so focusing on a specific customer or group of customers where they’re all similar is the key and you can build your business from bottom to top with great focus.
The real customers Azeez will have will be owners of Toyota cars, drivers of Toyota cars etc. Those are his target customers and no other car brands.
Coming articles will shed more light on how to segment multiple groups of target customers. Understanding this will help you effectively decide what group of customers to pursue first, why and how.