Knowing your ‘Consumer’ and your ‘Customer’
This is the first of three blogs that describe the underpinning all businesses need to have to enable growth.
You will often hear people use the terms ‘customers’ and ‘consumers’ interchangeably. By ‘consumers’, this means the end user of your product, brand or service. The ‘customer’ might be the person that actually buys the product (see below), who may or may not be the end user; or you might even describe your customer as a retailer you’re selling to, or the business you’re selling to in a B2B environment. It’s a bit confusing and you can get lost in the language, but just make sure you know which one you’re talking about, and whoever is listening is clear as well.
As independent small businesses, which you will have started up yourselves, you will all have an intuitive and instinctive understanding of your consumer. That’s essential, as that passion and detailed knowledge has to be evident when you’ve created the opportunity to meet with a Buyer of your business proposition.
The Buyer will expect you to be able to describe your consumer succinctly, how they shop and how they relate to the retailer’s customers. They will want and need you to:
Know your CONSUMER
- Who is your consumer?
- How would you describe them? Bring it alive so it’s more than just the demographics (e.g. gender, age, social profile) but a real in depth understanding of their needs and attitudes
- Do you have different consumer types?
- What does your consumer want and do they all want the same?
- Is your knowledge grounded in customer insight? Is it really? In other words, have you got evidence from any research, however small? This is essential if you are to avoid your own natural bias.
Know your SHOPPER
- If it isn’t the end consumer buying your brand, product or service, do you know enough about the person who actually does the shopping?
- For example, if the end consumer is a teenager, what do you need to know about the mum or dad who may be the shopper? If you’re selling B2B, it helps to have a better understanding of the end-to-end customer buying process than the buyer you’re talking to.
If you’re selling a product or brand, know your RETAIL CUSTOMER
- What is your retail customer’s strategy?
- What are their issues?
- Who are their consumers or shoppers?
- How do their consumers match up to your Brand?
- How are they trying to achieve competitive advantage? In other words, how are they trying to ‘win’? Are they competing on a price-led value approach (e.g. Aldi) or do they pride themselves in the service they offer (e.g. John Lewis)
- How does your product, brand or service meet their needs, and help them address their business issues?
There’s a fundamental reason for doing all this. If you take ‘marketing’ at its most simplistic level (I don’t, as it happens) to be about communication, then how do you communicate effectively if you don’t know who you’re talking to?
Knowing your consumer, your customer, your shopper, inside out and back to front allows you to decide how best to reach those people through pack designs, social media and other channels.
Without it, comes wasted effort and extra cost. With it, comes targeted effort and business growth.
Knowledge = Growth
Ross Crombie (@rosscrombie) is Owner, Crombie Consulting Ltd and an Entrepreneur-In-Residence at Nottingham University Business School.
Ross's next blog will be about Knowing your 'Competitors' and your 'Market'.