A common mistake of small and home-based entrepreneurs is their failure to take time to identify their specific customers and understand exactly what these customers want. Finding and studying potential customers for your business is an extremely important endeavor. Many businesses have closed shop because they have failed to clearly identify who will want their products, resulting in poor sales and crashing bottom line.

To help you capture the right customers for your business, you need to ask the following questions:

1. Who are your key customers?

Make a list of who you think may want, use and need your products, services or web sites. Be specific as possible. Your marketing plan will then focus on how you can reach each of your market segments.

If you are running a political liberal blog web site, for example, do you think that your content would interest the staff members of congressional members, news media, or general public interested in liberal ideas? Who else would want to check out your site and read your content?

If you are planning to buy a nightclub, who do you think will be your customers? Will it be the tourists & businessmen visiting your area, the young childless professionals and single adults, the college crowd, or will you be targeting residents in your neighborhood?

In identifying customers, you need to consider the demographics, geographic as well as lifestyle factors. The demographic factors entail knowing your target population s make-up in terms of age, gender, income level, occupation, education, and family circumstances (married, single, retired and so on). What income bracket will your customers come from are you thinking of a hip nightclub attracting younger customers, or do you want the businessmen belonging to upper income bracket to serve as your main clientele?

When analyzing the geographic factors of your target customers, you need to look as to where and how they live. Is your brand-new clothing line something that would attract the urbanites, country folks, or suburban soccer moms?

Recommended Sources:

• American Incomes: Demographics of Who Has Money (New Strategist Publications: 2001)
• Household Spending: who spends how much on what (New Strategist Publications: 1997)
• Sales & Marketing Management magazine (Check out their Survey of Buying Power report)
• The Sourcebook of Zip Code Demographics (CACI: annual publication)
• Lifestyle Market Analyst (Prepared by: National Demographics & Lifestyles)
• Mediamark Reporter (Database in CD-ROM format covering consumers' lifestyles and buying habits for hundreds of products such as electronics, personal care, beverages, appliances, and automotive)

2. What do they care about?

Using the example of starting a web blog on liberal political issues, you now need to ask yourself why your target audience would bother to visit and read your content? Maybe the staff members of congressional members would like to be sufficiently well informed on policy and debate issues. Maybe the conservative members would want to see the opposing side when they talk to the media. Maybe they want to see how the public views the policies. And so on and so forth.

The idea is to write down why each target audience would need and care about your products and services. If you have 5 key target audiences, then you must provide the answers to this question to each of your 5 target audiences.

If you have no idea why each of your market segments would need your products or services, then take time to go out and actually ask them. You may wish to call an acquaintance of yours working in Capitol Hill what they want from a liberal blog site. Or you can ask your friend who loves to party what he wants from a particular nightclub.

You can only design and market your business effectively if you are able to respond to your customers needs.

3. What parts of your products/services appeal to them? What parts do they value?

Once you have identified who your target customers are and what they need, the next step is to look closely at your own products. Then match the salient points of your products that meet your customers needs and wants.

For example, you intend your blog site to be a showcase of your analysis of the latest policy issues from a liberal perspective. Why will your blog site appeal to your target audience of congressional staffers? The reasons may be two-fold: you will provide information and analysis of issues that are new to them (congressional budget staffers may not be aware of the issues on regulation); and you will provide information on policy issues that will be most relevant to election debates.

4. How does using your products/services benefit them?

What would a congressional staffer gain from a liberal blog site? First, you will provide fresh analysis that is available online 24/7 (makes it easy for the staffer to get information when on the campaign trail). Second, your site will provide a liberal perspective on the issues (a conservative congressional staffer would know the criticisms their positions receive, while the liberal staffer s perspectives would be reinforced by your analysis).

5. What is your message to your target audiences?

A positioning message tells the prospect what you offer and how you're different (i.e., better) than every alternative and in the customer's mind. Called positioning statement, it forms the foundation of your marketing messages. Using the answers to the questions above, you can frame your positioning message as follows:

For (put the name of your segment/the people who you are targeting), our product or service provides you with (put in the names of the benefits the target segment is looking for), because compared to the competition (now, figure out why your company can provide these benefits better than the competition).

6. What is your work plan?

Once you've considered the key demographic factors, assembled your customer profile, determined the product benefits, and prepared your positioning statement, then you are ready to draw up your work plan. The work plan will contain specific steps that you need to do in order to reach your target audience. Your marketing work plan needs to a list of the tasks you need to do, the objectives of the tasks, and name of the person/organization responsible for the task, and timeline for its completion. You will need a separate work plan for each of the target customer that you have identified in step 1.

Your work plan will enumerate your marketing options and schedule that would best fit your budget and achieve your objectives. It is pointless to include in your marketing work plan tasks that are beyond your current budget. Should you advertise? If so, where? Who should manage your advertising campaigns third party or yourself? Should you send out a press release? Should you enroll in the Google Adwords program to advertise your business in the Google search engine and their participating publisher networks? Do you need to conduct a feedback survey two months after launching the site?

Revisit your work plan every six months (better yet, every month) so as to keep you on track to your goal of attracting the right customers for your business.

Reaching customers and prospects is the goal of every business. However, the success of your business hinges on its ability to reach the right customers, particularly if you are on a tight budget. Only by reaching the right prospects and converting them into long-term customers --can you truly say that your marketing has been effective.