In banking and financial services there’s a set of regulations called Know Your Customer or KYC for short. If you’ve opened an account in another country in the past few years you will have experienced the process which can be administratively complex!
One of my clients was opening an account in Hong Kong and the standard procedure of “Please call into the branch with your passport” was not very helpful. The ultimate owner is the person whose identity must be verified – and in this case that was a Silicon Valley entrepreneur who had no plans to visit Asia soon!
Knowing your customers and knowing your market is vitally important for any business. It’s not a compliance issue (as it is in banking) but a tool to help you win more customers and do more business.
I was reminded of this when I heard Lord Karan Bilimoria describing the early days of Cobra beer. He and his partner marketed the beer to independent Asian restaurants and their efforts laid the foundations for the success of Cobra.
He knew his market; he knew his customers and he had created a product to fit with their offerings and their customers.
Had he tried the same approach with many (most) of the restaurants on the high street it would have failed, as they are not usually independent and the manager on the site has little authority to purchase anything!
Had he tried the same approach in another country it might not have worked. In the US, where there are plenty of independent restaurants, the majority (in my experience) do not serve alcohol at all.
If you don’t have a really good connection to your market and a thorough understanding of why your customers choose you, the chances are that your marketing efforts will misfire.
Don’t assume that you know why they buy – assumptions are dangerous and they may be buying for a reason you don’t consider important.
Ask your customers why they buy; ask the ones who have left why they are leaving. You might be surprised by what you learn.