Who Are Your Customers? Understanding Customers & Demographics


It’s surprising how many business owners there are that don’t have a clear idea of who their customers are. This should be a priority — how can you sell something when you don’t know who you are selling to or what they actually want?

Start by writing a profile of a typical customer.

  • Age
  • Gender
  • Marital status
  • Occupation
  • Income level
  • Location
  • What does your perfect customer want?
  • What problems do they have?
  • What benefits does your perfect customer value most about your products and services?

Think very carefully about this because sometimes your customer is not always who you imagine them to be.

A Case study

An associate of mine runs a weight loss clinic and when she was doing her market research, she assumed that the ideal customer was a professional woman, between 25 and 40 years of age, wanting a quick fix for stubborn fatty deposits using a laser machine.

However, as the business developed over the first year, she realized she was actually attracting a different section of the market. Because her business was a medical clinic, rather than a beauty salon, she was attracting men rather than women as her clients. It turned out that men wanted the treatment she was offering just as much as women, but were not prepared to go to a beauty salon to get it. Furthermore, men tended to be the ones with money to spare for this type of high-end personal service — women, it turned out, felt guilty about spending money on themselves, particularly those with children.

The moral of the story is that sometimes your market will appear in ways you can never predict as your business develops — it is vitally important to keep doing your market research, keep evaluating and analyzing who your customers are because they may not necessarily be the ones you targeted originally. Watch for new and emerging markets…

So, market research is an on-going task but whether you are starting out with a new business or whether you are already established and looking to expand your business, market research will give you a fuller picture of the kinds of products and services that you could develop.

What’s already out there?

It is vital for finding out what products and services are already available and it can help you to discern whether your business is meeting your customer’s needs and expectations. By having this information available, you can adjust your offer, change your package of products and services, and look at alternative methods of delivery and so on. Without market research, you will never know whether or not you are on track. Market research is like having a road map — you build the map by researching the lay of the land and all the various routes then decide the best way for you to get to your destination.

A marketing plan is absolutely vital to any business and should include the results of your market research. Whether you are starting from scratch, or tweaking your existing marketing plan, you should undertake a thorough and up-to-date assessment of the market. It is vital to your success because competition is fierce, especially with the vast scope and reach of the Internet.

So how should you go about this?

Conducting market research

There are two main methods of conducting research — primary and secondary research. Primary research aims to gather information from analysing current sales and current practices, both in your own business and those of your competitors. Secondary research aims to review the data that has been published and already available on other businesses and trends in the market.

Primary research

Primary research is information that comes directly from the source — in other words your prospects and customers. Primary research should gather data about current sales and the effectiveness of your business as it stands. Analyze your sales figures and take a critical look at your current business practices. You should also look at your competitors and see what they are up to currently.

Most small businesses will gather this information themselves, although you can hire someone to do this for you if you have a large budget.

There are two basic types of information you can gather using primary research methods: Exploratory or specific.

Exploratory research, as the name suggests, helps you to explore the subject and is usually open ended. It helps you to define a problem and uses fairly unstructured and lengthy interviews with a small group of people.

Specific research is more precise and is used to pin down those problems that were identified in your exploratory research. It is more formal and detailed.

When you conduct primary market research, you should include:

  • Interviews with customers or prospective customers: Ask people what they think and make it a regular practice to get feedback from your customers. Ask them at the time of purchase, or call them at a later date.
  • Questionnaires: Send out a questionnaire by mail or online to get the views and opinions of your customers and prospects. Ask specific questions and use tick boxes to make it easy for people to fill out. Make your questionnaires short and to the point. They should be no more than two pages long.
  • Surveys: get a general idea of what people want by doing a survey. This is usually a lot more detailed than a questionnaire and you may need to offer an incentive to get people to fill one out. A freebie or money off voucher might be a good idea and will show your appreciation of people’s time.
  • Focus groups: you can get valuable information by getting feedback via groups of people who might be interested in your products and services. There are many different groups that communicate online, so it should be easy to target the people that can offer opinions on your type of business.

Think carefully about the questions you ask and keep them as concise as possible. Think about the issues that are most important to your business and ask questions such as:


  • What factors to consider before buying this product or service?
  • Are there adequate products and services to choose from in this area?
  • What do you like about the products and services currently available?
  • What do you dislike about products and services currently available?
  • Can you suggest any improvements?
  • Would you like to see new or different products and services that suit your needs better?
  • What sort of price would you pay?

You will probably find that the response rate for questionnaires and surveys is typically quite low — around 3 percent is a typical return rate, with 5 percent considered very good.

If you are sending out questionnaires or surveys in the regular mail, make sure you include return mailing costs.

Telephone surveys are usually the most cost-effective and bring results much quicker than waiting for people to return questionnaires in the mail or by e-mail. Generally, the response is much better because people feel awkward about refusing to answer questions over the phone — it’s easier to ignore a letter or e-mail.

When conducting telephone surveys, be prepared and have a set method of approaching people:

  • When your subject answers the phone, ask if it is convenient for them to talk to you
  • Have a script ready to jog your memory but don’t simply read it out — take time to learn it and speak in a natural voice
  • Confirm that you have the right person that you need to speak to (for example the homeowner)
  • Quickly get to the point and avoid long pauses, as your subjects will lose interest and want to wind up the conversation
  • If you have a lot of information to collect, ask if they would allow you to call them back another time for part two of the survey

Secondary research

By conducting secondary research you can analyze a wide range of data published on your area of interest. You will get to find out who your competitors really are and what they’re up to, identify sections of the market for you to target with your own products and services and you will be able to assess current and future trends that could affect your business.

With secondary research you can find out more about your customers — their lifestyle, age group, gender, behavioral patterns and so on.

Analyzing your data

There are two methods of analyzing your data:

  • Quantitative
  • Qualitative

Quantitative methods

Quantitative methods use mathematical analyses to look at statistically significant differences. For this method you need large sample sizes and they are generally more accurate than qualitative methods.

You may already be using quantitative analyses in your business. If you have Web analytics (available from Google) you will be able to find out how many visitors your website is getting, how long they stay on the site, where your leads are coming from and which pages they are visiting, and so on. These can be very valuable data that can help you develop your business.

For example, if you have been running your business for two years and you notice that hardly anyone visits the page on a particular product, you have to ask yourself if it’s worth continuing to offer this product. Focus instead on the products and services that people are interested in and develop them further. It’s pointless flogging a dead horse!

Qualitative methods

Qualitative methods are useful for understanding your quantitative analyses. They can look at the details of why it is you get the results you do – basically, it is the discussion around your results. Qualitative assessments help you to uncover problems and find solutions, which could lead to better services, new products and effective ways to diversify your business.

Qualitative methods generally have small sample sizes and rely on questionnaires, surveys, asking customers what they think and so on. They depend on getting people’s opinions, beliefs and values.


Failing to do enough market research is one of the biggest mistakes that business owners make. Many people gloss over this important first step in understanding the market. I have to say that many business owners think they know best what their customers want and don’t believe in undertaking market research — however, their arrogance is likely to be their downfall.

  • Only using qualitative methods: other mistakes include only using qualitative research methods — gaining people’s opinions — rather than getting quantitative data. It is vital that you use both methods so that you can achieve an unbiased picture of the market. Relying on qualitative data only will severely limit your understanding and could lead you completely down the wrong path.
  • Only using secondary research: you should conduct your own market research, which is based on your own particular business, rather than relying solely on secondary research which is more general. Secondary research can give you a good idea of what’s going on in the market, but will not give you the specific information you need to be able to make decisions about your business. Also remember that secondary research can be out of date — sometimes by several years — and markets can move pretty quickly. If you rely on out-dated secondary research only, you will be effectively living in the past and not addressing current or future trends.
  • Only surveying people you know: this is a common mistake that small businesses make. They only conduct market research among people they know, such as family members, friends and associates. However, this is not always the most effective way of gathering information — you need to survey real customers to find out what the market wants and needs and what they expect to get.
  • Relying solely on the Internet: the Internet is a fantastic source of information! The problem is that most of your competitors will have exactly the same information available to them too — all it takes is a keyword search to come up with the same website as your competitors have access to. To get a more accurate and a fuller picture, you should use a variety of resources both off-line and online. Universities, colleges and libraries as well as business centres have a wealth of information available — much of which your competitors won’t bother to get.

Market research is important

The main purpose of market research is to help you develop the right products and services for your prospective customers. It can help you solve marketing problems and highlight the best ways to find your customers and deliver your offers.

Whether your business is fairly new or whether you have been established for years, market research is absolutely essential and is an on-going task that you should make time for. As I have said before, the market can change very rapidly and you will be left behind if you don’t keep up with current market changes and trends.