Your business' success depends on your ability to attract customers and keep them satisfied. In fact, satisfied customers are one of the most effective marketing tools you can have, since they refer more customers to your doorstep.

Customer Segmentation

Customer segments are the different types of customers your industry serves. Each segment is bound together by buying behaviour, needs, demographics, tastes, or other characteristics. If you're a start-up business, dividing your market into customer segments will give you a sense of the different groups of customers you can choose to target. While, if you run an established business, customer segmentation will get you thinking about the other types of customers you might want to target.

Begin by breaking the broad market for your product or service into customer segments. Examples of customer segmentation are:

• If you run a swimming pool cleaning service, home pool owners, high schools with pools, apartment buildings with pools, and sports clubs are different customer segments.
  
  
• If you're a DJ, event planners and nightclubs are different customer segments.
  
  
• If you own a greenhouse, landscapers and home gardeners are different customer segments.

Target Customers

From your list of customer segments, identify your target customers - the type of customer your business focuses on - and their defining characteristics. Ask yourself:

• What's most important to these customers when buying a product or service like yours? Is it price, quality, convenience, level of service or something else?
  
  
• How often do they buy? How do they prefer to make their purchases - by shopping in person, online, or by telephone?
  
  
• How are these customers currently filling their need for your product or service?
  
  
• What aspects of your offering will convince them to choose you?