Segmentation, Who will want to buy from you?

If you've got a product that's reasonably useful, of moderately good quality and not too expensive, somewhere out there are some people who will want to buy it. As a small business, you're looking for a comparatively small number of people - the trick is to find them.

Actually, the trick is not to find them but to find them without spending a lot of money. If your scope is local, writing something for the local paper, local mailings and leaving brochures at local stores are useful. If your scope is larger, a web site, news groups and mail lists are good. The key to all this is to analyze who your typical customers are going to be.

Start by analyzing your existing customers. Not all of them - just the good ones. Scratch the ones who don't pay on time, the ones who need hours of attention for a tiny sale and the ones who misuse the product and then want free replacements. Identify those customers who are profitable for you and whose numbers you want to increase. (This does not mean that you can't make a business out of meeting the needs of fussy customers with an especially high level of service - you'll just have to charge more.)

Once you've identified desirable customers using you existing customer base, try grouping them by common characteristics. As a small business person, you'll know a lot about many of your customers because you deal with them on a much more personal level. If you can establish several groupings of desirable customers, you can then target your efforts much more effectively and with greater success.

FIRST PUBLISHED AT SUITE101.COM