I’m no retail expert but I do appreciate the importance of understanding who your target customer is. In my humble opinion there are many companies out there who are struggling as a direct result of not adapting to the changing behaviour of their target customer or even worse being really unclear who their customer is in the first place.
Here’s the theory:
In general terms companies exist for one purpose – to meet some kind of human need. The revenue and profits generated by the company result from one thing – customers who are willing to pay money for products and services that meet their needs. So in terms of overall business strategy, it seems logical that any sales, marketing or business development initiative should start with a solid understanding of the customer you are trying to sell your stuff to. The theory is that if you really understand your customer, you will have a better chance of reaching out to them in a way that they are more likely to respond to.
A recent article that appeared on the BBC Business website reminded me of the importance of understanding your target customer.
Bonmarche revival: ‘It just needed to be loved
Trading conditions may be tough on the High Street, but this fashion chain is making quite a comeback. In fact, it is hard to think of another retail business that’s turned itself around, from administration, as quickly or as successfully as Bonmarche. The company, and its owner, the fashion chain Peacocks, went under in January 2012 in one of the biggest retail collapses since Woolworths. It buckled under massive debts.”
Beth Butterwick was put in charge of the turnaround as chief executive,
“I could see the opportunity to really cater for this growing demographic. I could absolutely see that Bonmarche was a gem amongst the High Street, it just needed to be loved”, Mrs Butterwick says.
Women’s fashion is hugely competitive, with many chains chasing the younger shopper. Mrs Butterwick decided that the key to Bonmarche’s success was to focus solely on older women.
“The business before had drifted into catering products for a much younger customer and putting prices up. In other words they had moved away from the core values of our business.”
Check out the article here
My interpretation here is that Bonmarche (and its’ top management at the time) sort of, ‘lost its way’. It drifted away or failed to keep up with the changing behaviour of its target customer (older women) and lost its focus. As a result it ended up on the critical list and almost never made it. Thankfully the new management team lead by Beth Butterwick seem to know what they are doing and the results speak for themselves – they now have 265 stores across the UK and a market cap of more than £100 million.
Get to know your customers – get to know your customers as well as you possibly can.
Their circumstances, their social groups, what motivates them, their lifestyle, their needs and desires, hopes and aspirations, fears and concerns.
If you really understand your target customer you’ll have a much better chance of delivering the value they seek and as a result enjoy the benefits of their loyalty.