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How to profile your customers and prospects
HO are your customers and what are their needs? The manager or owner who knows probably has an operation that is going places.
If your customers are unknowns, the question is how do you profile them. Neighborhood demographics vary. Even contractors have different needs. The answer for one store is not necessarily the answer for every store, but there are methods of determining customers and requirements that are applicable to most dealers.
First, it is necessary to determine your market area. Using your location, accessibility, competitors and the addresses on your mailing list, charge accounts and deliveries, decide your geographical coverage. Next, take a city map of the area and draw a circle of the determined radius with the store as the hub. This is the neighborhood you need to analyze.
Factors to be determined include types of households (young families with children, single-parent families, middle-aged couples, seniors, singles, working women); the types of homes, single family or multiples, style, size, age and approximate value; the income and social level of the residents, and their professions and vocations.
Sources of this information vary from Chamber of Commerce records and talking to realtors to actually walking or driving through the area taking notes. Some stores complete successful customer profiles by sending out questionnaires and encouraging their return by making the person filling it out eligible for a sweepstakes prize. Other stores provide the cashiers with a check sheet to record approximate age, socio-economic status and items purchased. At least one chain asks customers to tell them the kinds of merchandise they want.
Interpretation of the statistics is important. For example, a recent study reports that half the discretionary income in the United States is held by those 50 years and older. Average households of ages 65 to 75 have savings of $65,000 while the 35 to 45 year olds have $15,000 or less. Another study emphasizes the older homeowner's need for services such as painting, repairs and gardening. Combining this information should indicate to a building materials merchandiser that if he has many over 50 customers, he should consider installation or maintenance services. Also, since they have more discretionary income, customers are probably more interested in quality merchandise.
Suppose the retailer has a market area of older homes. This should indi-
Story at a Glance
Ways to identify your market area...how to target present and potential customers...what the statistics mean...tailoring merchandise to fit the profile.
cate that materials for remodeling, replacement and repair will be good sellers. If he is in a newly developed area, he should expect materials for decks, sprinkler systems and landscaping to be needed as well as draperies, floor coverings, fireplace screens, barbecues and other items needed for a new home.
If a dealer has a heavy contractor mix, he must profile his contractor customers and their needs as well. The contractor who builds apartments will order different materials than the one who does custom homes. The contractor who builds contemporary homes will need different materials than the one who builds ranch or colonial designs. These differences will probably be consistent, extending from basic building materials through tile designs, light fixtures, hardware and appliances.
The value of knowing the customers and their needs is the ability to slant the merchandising toward them and specialize in what they want and buy. Specializing in a particular group is common practice among other retailers. There are apparel stores for juniors, queen sizes, tennis players, runners, joggers, expectant mothers, Ivy League conservative types, mod dressers, and so on. Furniture stores specialize in contemporary, country, oak, Scandinavian, patio, antiques, you-name-it. Groceries, too, tend to slant the products on their shelves, handling ethnic foods, health foods, gourmet items, and already prepared hot food as dictated by their customer mix.
Building materials dealers should be just as wise and selective. If you don't know your customers and what they need, get acquainted. It will pay.
