1. Importance of identifying your Customers

2. To see just how important a good description of your ideal customer can be in clarifying your business plan and directing your company’s activities con­sider the case of a rather unusual e-business: a Web site startup specializing in selling underwear with sex appeal The first time the company’s young entrepreneurs sat down to write a paragraph describing their ideal customers, they came up with this

3. “We're going after Internet shoppers with a sense of humor, adventure, and playfulness - but who are a bit reluctant to purchase intimate apparel at a bricks-and- mortar store. Our customers are likely to be women buying our products for themselves or for their significant others.”

4. No doubt a fine beginning. But this snapshot leaves out some crucial aspects. How is the ideal customer likely to find the sensual underwear site in the first place? Why would she choose to buy underwear here rather than somewhere else? What motivates her to buy - price, quality, special features? Is she likely to be a repeat buyer? What will convince her to come back and shop again? Encouraged to flesh out (sorry) their snapshot of the ideal customer, this is what they added:

5. “Most of our customers will hear about us by way of advertising on other selected Web sites and through ads placed in national women's maga­zines. Our ideal customer is between the ages of 18 and 35. Most are single or recently married and live in urban areas, especially on the east and west coasts. Because they are Internet savvy, they also tend to be somewhat upscale and have a certain sense of sophistication. Quality matters more than price to these customers. And quality is determined both by the materials used and our designs. The bottom line: We create products that make our customers feel sexier. We hope that if we deliver on this promise, our customers will keep coming back to us.”

6. Now the young entrepreneurs were getting somewhere. The expanded description includes a few key demographic characteristics where the ideal customer lives, her age, her marital status. And it begins to zero in on what drives her buying decisions.

7. When the senior management team looked over the snapshot they'd drawn, they began to understand a few new things about their customers and themselves - insights that helped them hone their marketing strategy. First, they realized that what their customers really wanted was to feel sexy and desirable. The intimate apparel was just the path to that end. Sure, the company was selling underwear, but it was really marketing sex appeal.