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Starting a business

How to Identify and Attract Customers

Finding customers is among the most daunting challenges for small business owners, especially for businesses that have just opened their doors. Check out these proven strategies to find customers and generate business.

Identify Your Target Market

Hone in on your ideal customer

Who is your ideal customer? Are they male or female? Young or old? Do they live on $25,000 or $250,000 a year? Once you narrow down who you are trying to reach, you can better sharpen your marketing strategy.

For example, if you’re starting an upscale hair salon in a city, your ideal customer might be a fashion-forward woman between 25 and 35 who has a disposable income.

Define what your product or service helps with

They need their hair cut; you can cut it. But it’s not that simple.

Target your ideal customer by getting specific in your offering. In this case, you’d focus on delivering high-end beauty products, precision stylists, and the latest hair trends. You must also make sure your business is accessible and that your services are priced right.

Stay focused

Your business can’t be all things to all people. Choose your target and sharpen from there. A skilled hairdresser at your trendy salon can surely cut a child’s hair and charge $10, but by trying to cater toward more than just your target market — young women who are willing to pay $150 to get their hair done — you lose your audience and your brand.

But don’t be afraid to branch out

Once you’ve been in the game for a bit, you might identify new markets you’d like to reach out to. Maybe this upscale hair salon could start catering to businessmen who appreciate the luxury experience, for example. A customer relationship management system or enterprise planning software can help you analyse your sales data to identify patterns. Databases like Ibis World, Hoover’s and Forrester can help pinpoint trends too.

Build a Specific Strategy

Promote based on the markets you’re looking to reach

You can put the word out about your new endeavour and see what happens, but without direction, your message won’t travel very far. Be specific based on the markets you’re looking to reach.

If your business is a local cocktail bar and you’re trying to cater to an affluent crowd that comes into town during the summer months or on weekends, you might consider adding wine pairings to the menu or bringing in a high-profile chef to attract diners seeking a more comprehensive, luxury experience.

Maybe Tuesday evenings are particularly quiet. Offer happy hour prices to students who might want to host a study group at the bar during that time. Invite the community in for events or open mic nights. Appeal to the local music scene, by scheduling weekly live music nights.

Direct your promotions appropriately

You wouldn’t market a Tuesday study group to your affluent weekend customers. And those students may not appreciate your wine pairings. Adjust your promotional themes to emphasise the benefits that appeal to that specific market.

In addition, offer a loyalty program to build your base of regular customers. A few different loyalty program models exist. First, is offering some sort of monetary benefit; take a punch card for example — buy nine cups of coffee and get your 10th one free. Or offer exclusive discounts by using a card or phone number.

The second is to provide a service that matches the values of your customer base. TOMS Shoes does this with their one-for-one program. Rather than offering their customers a direct reward, they offer a pair of shoes to someone else who needed them. The same can be done on a smaller scale — like a local nursery that plants a tree for every customer who hits a certain spend.

Whatever you do, tailor the incentive to your ideal customer to keep them coming back. Further, encourage your loyal existing customers to recommend you to others. Offer “refer a friend” discounts.

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Form strategic partnerships

To attract new customers, one of the most effective strategies is partnering with other non-competing businesses that already have your target market in their customer base.

For instance: A pastry chef without a storefront might partner with several local coffee shops. The coffee shops will sell the pastries and both parties will get a cut of the profits.

To form a strategic partnership:

  1. Define your ideal customer. Who are they and what types of products and services might they buy?
  2. Determine what other companies serve that same market demographic.
  3. Develop an offer that would be mutually beneficial to your potential partner and your company, then pitch them.
  4. Supply your partner with marketing materials they can use to promote you to their customers. Be strategic about turning new customers you attract into repeat buyers.

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Get the Word out

Get online

Build and reach out to your network. Use your own personal and professional online networks to reach prospective customers wherever they are. Connections — even those made online — go a long way in developing rapport for your new business.

Get on forums. Forums are a good networking tool for brand-new businesses looking to build a community within their industry. If you’re in the custom hot-rod business, you should be keeping up with and posting on online message boards where those hot-rod buyers hang out. Don’t throw your sales pitch around; nobody likes spam. But keep a pulse on what they want and build goodwill. That way, when they’re ready to buy, you’ll be their go-to.

Optimise for search engine results. On your blog or site, feature content that might appeal to your target market. You can determine which keywords are popular by using tools such as Google AdWords or hire an SEO professional to assist you.

If you’re a trendy restaurant in Northern California trying to target young singles who might be traveling to the area, feature content — and the related keywords — that would appeal to them. Include the terms they might search for on Google, like “artisan cocktails” or “san francisco restaurant scene” in the copy.

In addition, you can purchase pay-per-click ads or ads displayed on search engines. This is a great way to show up on page one of the search results, even if your website is on page three.

Encourage reviews. Amazon’s website is a great example of a site that uses reviews to help customers choose between competing products. Reviews build your social credibility and can boost your sales.

Customers will leave reviews organically — but you can build positive rapport by delivering the best product or service possible. Though you can’t incentivise people to leave reviews, you can direct satisfied customers to where they can leave them.

Use Social Media

Determine the best channels for you. Contrary to what you might believe, you don’t have to be present on all social media platforms. In fact, if you’re going to create a profile and then neglect it, it’s better if you don’t have a profile on it at all. In the design space, Instagram and Pinterest are the most popular platforms. For a services company, Twitter might work best. Evaluate what your competitors are using, then experiment and see what your customers respond to best.

Update frequently, but not too frequently. Nobody wants a constant storm of noise from your business coming through their social feeds. LinkedIn says one post per weekday (or 20 per month) has the best engagement rate. SocialBaker found that three tweets per day was the lucky number. Regardless of the studies, be judicious and intentional about your posts. Keep followers up-to-date but don’t overdo it.

Use it to listen, too. Though it might be tempting to use your social channels to broadcast all the things you have going on, remember to listen and respond to customers too. Use the tool to build relationships and communicate with your community rather than using it only to toot your own horn.

Buy Facebook ads. Advertising on Facebook can be very effective in targeting your niche audience, and a very affordable way to do so. Since your ads end up in front of only your target customers (determined by demographic, location, interests and behaviours) it’s a much more tailored approach than advertising on a park bench, for example. With tracking and real-time updates, you can see which ads perform best and update your approach from there. You can’t get these benefits from advertising on TV or radio.

Step into the Community

Speak. From local business associations to state or city conferences, speaking engagements are available everywhere. Get your foot in the door with valuable content, not a sales pitch. Make sure your audience can walk away having learned something. Start with your local chamber of commerce to see what business events are on the calendar. Also, check your local library and for functions in your area.

Enter competitions. Winning an award showcases your talent or product and generates some interest from the press. Many contests are free to enter. See which are well-known in your industry.

Do good to build goodwill. Create and foster goodwill in your community by offering charitable services. Sponsor the sports team, organise a service day, or offer free or discounted products to a select group of people. It’s good for PR and for those you’re helping.

You might eventually have the marketing and advertising budget to take out a radio ad or an ad in local media publications. You also might eventually need the help of a marketing agency. This is great because it means you’ve grown! But there is a lot you can do now, in your first year, to reach your customers without breaking the bank.

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