Know Your Customer

First things first: a key truth to understand before you even begin to sell your product or service is that it’s actually not about you, your service, or your product at all. It is also not about how well, how elegantly, or how loudly you can tout your products or services. It is, instead, about your customers.

But what exactly does that mean? If you don’t know your prospective customers, don’t go into business, because who they are and what matters to them is the only thing that should matter to you (as it pertains to marketing). It is all about your customer...

When you think of “who they are,” you should be able to describe them in some detail. What is their age, gender, socioeconomic status? These are called “demographics.” Where do they live, what do they drive, what is their marital or family status?

Next, you need to go a little deeper to understand their needs, motives, and concerns. What do they like to do for fun? What has made them successful? What do they fear? What publications do they read? To what groups do they belong? Who are their industry opinion leaders? Who are their partners, allies, and competitors? These are often termed “psychographics.”

At this point you’re probably wondering, “How do I get this information?” Excellent question. The answer to that may be the most useful secret shared in this book. This is highly confidential advice, so please read carefully. Here is the answer:

Ask them and LISTEN.

Yes, it may sound obvious. But time after time, entrepreneurs simply assume that they know their customers. After all, we all have the same basic needs and concerns, right? Wrong! I have been guilty of believing this too many times myself.

Here’s an example. One time we spent three weeks creating an online seminar series thinking we knew what courses and topics our community wanted and needed. When we launched the series, eagerly awaiting the imminent rush of registrations, what happened was quite surprising. There were a lot of registrations. However, those registrations were for only three of the dozen or so courses we offered. While these were filled to capacity, others did not get even a single registrant.

This came after weeks of work in creating the entire program, and I would have saved a lot of time and money had I just taken time to find out first, from my community, what mattered to them.

DISCOVERING WHAT MAKES YOUR CUSTOMERS TICK

There are a number of ways to “ask” your potential customers for information.

To some degree, the methods you choose will be driven by the nature of your business, your target customer, and your own comfort level.

When you contact existing customers or those you think fit the profile, do so solely with the intention of gaining more information about their needs—and do not turn it into a surprise sales call. You will find that people will be surprisingly forthcoming, as long as your task remains on course. Make it crystal clear that this is not a sales pitch and that you have no intention of making it one. Then ask them a series of questions you have prepared in advance. Here’s how to create an effective list of questions:

1.  First, brainstorm every question you can think of, and write it on a board or notepad.

2.  Next, reread each question and look for ways to extend or deepen it. For example, if your product is a gizmo for the consumer market, you might ask, “What stores would you expect to carry a product such as this gizmo?” Then you might go further and ask, “In which departments would you expect to find it?” and “How would you feel about this store if they did not carry this item?”

3.  Consider the negative or opposite of each question as well. Continuing the example above, you might ask, “Where would you not expect to find this product?”

4.  Be sure to ask financial questions. “How much would you pay for this service or product?” Then ask the opposite question, “What price would be too high?”

5.  Include questions that focus on the customers’ needs, not just the product’s or service’s attributes. For example, “Describe any issues you face daily, weekly, monthly that relate to [insert language describing the need your product or service addresses]?” “How big an issue is this for you?” “Have you ever discussed this issue with friends, colleagues, and peers?” “How have you addressed this need in the past?”

Once you have a long list of possible questions, go through and select the ones most relevant to you. Then tighten the language of each question so it is as clear and brief as possible.

During the interview (covered in chapter 5 of Your Million Dollar Dream), carefully document the answers. Also be sure to make any notes you can about the individuals (your potential customers) that could prove useful in your later analysis, such as their gender, ethnicity, estimated age and economic status, marital and parenthood status, and anything else that comes to mind.

People will often deviate from your expectations—but in so doing will share the most useful tidbit you get out of the entire interview. The key is to be quiet and listen, even after the interview is over. Often this is when people will drop their guard and make some of their most interesting and useful comments.

Excerpt from, Your Million Dollar Dream: Regain Control & Be Your Own Boss, Create a Winning Business Plan, Turn Your Passion into Profit, by Tamara Monosoff

1. Take a stand for yourself. If you are dissatisfied with your current circumstances no one will fix them -- except for you. It doesn't do any good to blame the economy, your boss, spouse or family. Change can only occur when you make a conscious decision to make it happen.

2. Take the pressure off yourself. If you know you want to do something new, but don't yet know the "what" or "how," don't expect that you should know what that "thing" is or the steps for getting there.

3. Figure out the Right Business for You. What do you already know? What are you passionate about? What are concrete business opportunities for you to consider? Give yourself permission to explore.

4. Adopt a Service Mindset. Regardless of the type of business you choose, you need to be committed to serving others -- customers, clients, employees, community, and investors.

5. Create Your Plan. As you write down your goals, strategies and action steps -- your business becomes real.

6. Build a Support Network. You've made the internal commitment to your business. Now you need to cultivate a network of supporters, advisors, partners, allies and vendors. If you believe in your business, others will, too!

7. Get the Word Out. Be willing to say who you are and what you do with conviction and without apology! Embrace and use the most effective online tools (Twitter, Facebook, YouTube, LinkedIn) available to broadcast your news.

8. Take Care of Yourself. This is an intense process and it takes hard work. Be diligent about scheduling time to de-stress. Walk in nature, meditate, meet a friend -- do whatever works best for you.

Thank you everyone who has been following the Your Million Dollar Dream media tour! If you'd like phenomenal PR coverage for your own business, there are still a couple of slots left in our PR program for June and July. This media opportunity with Ann Noder and Pitch Public Relations is designed specifically for moms in our community! Submit an inquiry on our Special PR Opportunity page if you'd like more information.

1. Perfect your message
You should be able to effectively describe your product or company in two sentences.

2. Zero in on your market
Pinpoint your market so that your media outreach coincides with your audience.

3. Be the Story
Provide your own content to the media for use -- such as 5-10 tips on your area of expertise. Make it clear they're able to reprint as is and you might get some terrific automatic pick-up!

4. Don't Date Yourself
Past coverage listed on your website can hamper efforts to get additional press. Don't make your company look like old news. Only list the most recent hits!

5. Leverage Exposure
Make sure you are showing off all the media exposure to potential retailers, distributors, buyers or investors.

If you're looking for phenomenal media coverage for your business, there are still a couple of slots left in our PR program for June and July.  This media opportunity with Ann Noder and Pitch Public Relations is designed specifically for moms in our community! Submit an inquiry on our Special PR Opportunity page if you'd like more information.

I don't normally use sports analogies, but for this column it just fits. So first, I should explain that, whether a boxing match lasts 10 rounds or not, that is the length I have chosen for the entrepreneurial bout.

Round 1: Like the ring of the first bell, you launch your business or invention fit, hungry and invincible.

Rounds 2-4: Big things are happening; every day sees a new customer or a newly opened door. New benchmarks are surpassed and adrenaline is flowing strong.

Round 5: Your confidence sets in. The crowd and media have been in your corner. You are working harder than you ever have and now have involved others who are dependent on you. It feels like just a matter of time before you turn the corner.

Round 6: You know that you are only four rounds away, but you are now starting to feel the weight of your gloves. Suddenly fatigue is near, and worry has replaced excitement.

Round 7: The rush of the first bell is a faint memory. You understand your business better than ever, and you've taken some tough blows. Just when you think your momentum will carry you, some of the weaknesses in your preparation becomes pronounced as your guard falls. Product or vendor problems arise.

Round 8: At the moment you are faced with your greatest challenges, competition shows up, which calls on your last reserves of energy and mental fortitude.

Round 9: In an attempt to find inspiration, you read stories about 10 companies similar to yours achieving triple-digit growth in half the time. Each story is accompanied by a photo of the CEO and her family in the Cayman Islands or enjoying hot chocolate in a ski lodge in Vail -- with the support of "both" of their nannies. Rather than feeling inspired by these stories, the feeling that things are unfair begins to creep in.

Round 10: Last round: What will you do?

See how you can turn the momentum and make it through being knocked down and discouraged in the business boxing match with success by reading the rest of Tamara's April Entrepreneur.com column "You Can Choose Success."

Feel like you need more support in your corner? Join our just-launched Mom Invented Community to start building your online support system today.

Hi Tamara!
How do I find someone to help me set up the business processes I will need for a large retailer... processes like EDI, liability insurance, etc. I'm negotiating with Target in the fall. Thanks!  -Amy

For those of you new to the term, Electronic Data Interchange (EDI) is the structured, electronic transmission of data between organizations. You would use it to transfer documents from one computer system to another, and it's more than simple e-mail: businesses might replace bills of lading and even checks with EDI messages. (Learn more on Wikipedia.)

If you've ever tried to set up EDI by yourself, you'll quickly learn that it's a terrible idea unless your background is in technology. By hiring a third party to manage it, you'll avoid costly mistakes. For example, big box stores like Target and Wal-Mart will charge you "compliance charge backs" if you make any mistakes when shipping or invoicing them for products delivered.

I'm sure there are other excellent resources out there, but I have had personal experience with EZCOM, a third-party service provider and will manage the EDI process. Their pricing is fair and well worth it!

Large retailers will also ask you to provide proof of liability insurance with very specific levels of coverage required. To locate an insurance broker, contact your local chamber of commerce or use the old-fashioned Yellow Pages. When you call, ask them if they sell product liability insurance.

Do you have a question for Tamara? Send it to her or leave it in the comments.

Even if you conduct significant primary and secondary market research and write a business plan, there comes a point in time where a distinct choice must be made to go forward or not. In some cases, the process of research and planning will reveal the best choice. In other cases, the right decision remains less obvious.

If you're debating whether to take the next step in bringing your product to market, rest assured that you're not alone. In fact, many companies that take products to market for a living face the same challenge. They may be less financially restricted, though the pressure is still significant. And every year companies launch products that fail to meet their expectations. I know this well as our own product business has had items fall short of our aspirations.

When we look at products internally as well as those we have reviewed through our product review program, and our contests, we face the same decision. So I thought I would share a few of the things we consider when we review an item.

• Practical use and benefit the item provides
• How complex will it be to produce
• Size of the likely consumer market for the item
• The realistic per-unit profit margin of the item
• Which retailers would likely carry and sell this item
• How will it be packaged and merchandised
• Safety and legal issues
• Fit with product line expansion plans

We find that once we carefully answer each of these questions, the right decision will become apparent, along with the strategic steps we'll need to take if we elect to go.

Still Stuck on What to Do Next?

If you want help with your invention research and determining your next steps in the inventing process, check out our New Product Evaluation Program. You'll get a patent search and legal opinion, a review of manufacturability and marketability, a phone consultation with Tamara Monosoff and more!

Start Your Evaluation Now!

Frankly, most inventions, and most new business ideas for that matter, should not "pass go" -- not because the ideas are not creative, clever or innovative, but because there is no market to support them. I’ve met many inventors who have filed a patent and handed thousands of dollars to an invention promotion company only to wonder if the invention was worth the money and effort.

So inventors and new entrepreneurs should ask themselves if they are willing to change their minds if necessary. It’s important to be willing to change your mind for two reasons. First, in today’s economy, people who are seeking a new way to generate income cannot afford to waste time or money. Launching an invention can cost thousands of dollars and years of effort. If something is not going to work, it’s best discovered early in the process.

Second, when you enter the process with a willingness to change your mind, once you have concluded that the idea is indeed worth pursuing, you can do so with all the more conviction... Continue reading the rest of Tamara's March Inventions column on Entrepreneur.com...

If you want help with market research and determining your next steps when developing your idea, check out our New Product Evaluation Program. You'll get a patent search and legal opinion, a review of manufacturability and marketability, a phone consultation with Tamara Monosoff and more!

Start Your Evaluation Now!

First and foremost, you must display your products in a way that is attractive and gives buyers a chance to easily see and evaluate them. It isn't necessary to break the bank on your displays, but it should be tasteful. While each company has its own approach to trade shows, based on our experience there are a few additional basics to keep in mind for first time exhibitors.

• If there are specific companies you wish to meet, find out if they will be at the show. Then contact them in advance and invite them to your booth.
• Plan to attend any industry events at the show that you can. These are a great place to get information. We always learn things about our industry we never expected.
• Promotions can add to your presence. Some exhibitors will have a prize on display that they will raffle away at some point. Visitors to your booth deposit their business card into a jar and that is how the entrants are drawn. Gift baskets, product samples, or a trip to Hawaii are all examples of special giveaways. (Check out Mom Invented® Super Charged Member Karen Horrigan's company Galaxy Promotional Products for great promotional items)
• Candy Jar Buyers seem to prefer chocolate.
• Think about your colors. You will want to be sure that your booth attendants are color-coordinated with each other and your booth colors.
• Wear comfortable shoes! You will be on your feet a lot. You will be miserable and not very effective if you choose fashion over comfort.
• Don't eat in your booth.
• Bring a tool kit: We have a trade show tool box that has some of the essentials we might need.
  • String
  • Wire
  • Stapler (plus a backup)
  • Blank file folders
  • Note pad
  • Receipt book
  • Pens
  • Business cards
  • Multi-head screw driver
  • Small hammer
  • Pliers
  • Scissors
  • Pocket knife
  • Double sided tape
  • Small tape measure

Looking for the right trade show to attend? If you have a maternity, baby or toddler product, check out Bebe Paluzza expos -- there will be five shows this year in different cities across the country. Learn more and request information...

Photo by Sam Galison

Dear Tamara,

What are some of your strategies for getting marketing exposure and publicity?

-- Delia K. in Plano, TX

Dear Delia,

Early on, I realized there were two distinct ways to generate awareness about my product -- one would involve paying (traditional advertising) and one would not! Fortunately, I found that the unpaid kind -- via public relations -- would better meet my needs as a new entrepreneur with a new product and a tight budget.

So what exactly is unpaid publicity? Certainly there is some cost -- your time and energy, or the dollars associated with hiring a public relations firm to do it for you -- but the common denominator is that you're not paying for advertising space. Instead, you're submitting product information to potentially interested parties -- like magazines, newspapers, TV shows and Internet sites -- and hoping they will pick up your information as part of their regular reporting.

Seems easy, right? Well, there is some finesse to it. Part of your job is convincing the reporter or editor that yours is a worthwhile product or story to cover. These individuals get countless press materials crossing their desks daily. That means you need to give them a compelling reason to include your product. On the other hand, reporters are grateful for interesting, inspiring stories and idea proposals -- so give them a good story or interesting product, and it's a win-win situation for you both.

How, specifically, can you do that?

Look at it from the reporter's perspective. What would compel them to cover your product? What need does your product fill? How does it fit into the bigger picture? Does it address a trend? Relate to a pop culture story? Is your backstory compelling? Is there a human interest angle -- ie: does it make people safer, healthier or happier? Does it reach diverse markets? Be sure to include an angle that gives larger context to your product. For instance, we present our product, Tidy Table Covers, as doing more than protecting the dining room table from stains and glue from kids' crafts. It allows kids to unleash their creativity without worry! And with more and more kids getting into kitchen-table crafts -- and millions of women embracing the scrap booking craze -- the product is fulfilling a need based on today's trends. We focus on these points when "selling" our story.

That goes the same for pitching to a TV producer. Include national statistics that explain why this story will speak to the TV show's viewers. Your pitch should also include ideas for other guests (including yourself, of course) that support the story idea and add color to the segment. In other words, give the TV producer a full picture -- even though they will likely change it – to help do some of their legwork for them, and to allow them to see how fabulous a segment this could be.

In all your communications, include as much relevant information as possible without bogging down the reporter with unnecessary details. That means including high-quality product photos, a product sample, if possible, plus contact information and all pertinent details -- it all goes back to the old Who, What, When, Where and Why's.

When approaching media, it's also important to contact the most appropriate people at the most appropriate media outlets. Fortunately today you can do most of it online very easily. Do some research to create an appropriate target list (ie: Maxim magazine won't be interested in your baby product, unless it's gadget-y and specifically for dads) and be sure you have up- to-date reporters' and editors' names. Getting them is relatively simple:

• Get on the Internet and Google the TV show, magazine, or newspaper you're interested in pitching, and get the phone number
• When you call, don't be afraid to ask the receptionist for the name of the specific reporter that relates to your area (ie: the fashion reporter for your new line of jewelry; the IT reporter for your newly invented software)
• Ask for the email address and voicemail extension for that particular reporter

Good luck!

If you’re ready to receive phenomenal media coverage for your product, there are still a couple of slots left in our PR program for April & May. This media opportunity is designed specifically for moms in our community! Submit an inquiry on our Special PR Opportunity page if you’d like more information.

Do you have a question for Tamara? Send it to her or leave it in the comments.

• There's a disconnect between the product and the consumer. In some cases, the inventor may feel it's an idea that can't miss because it's been validated by a best friend or a family member--but they've never really critically analyzed it. Even large companies with huge budgets can misjudge demand. Remember New Coke?
• There's a problem with price. If the price is too high for the problem the product aims to solve, people simply won't see the value in purchasing it.
• The packaging misses the mark. Perhaps it's not clear what your product actually does. Maybe the packaging is dull and gets lost on store shelves, or it's too large for the retailer to hang on a peg. Potential customers will lose patience, and you'll lose the sale.
• There's a product that's already working. Even if your product is original or patented, it may be so similar to something consumers are already using, they won't see the value in it.

You can avoid many of the above problems by testing for the following:

Product functionality. Before mass producing your product, do some focus group testing to be sure people want it--and like using it. The most important thing at this stage is for focus group participants to be completely candid. For instance, the first product I invented is the TP Saver, which prevents toddlers from unrolling the toilet paper from the holder. In my focus groups, I wanted participants to tell me whether my final product prototype was easy and intuitive to use and if it was something they'd purchase or recommend to solve the problem. I wanted them to point out any potential flaws or functional difficulties, so I could improve the product before mass producing it.

Comfort level with price. Everyone likes to solve a problem, but at what price? For instance, I assumed customers wouldn't be willing to spend $50 to solve their toilet paper problems outlined above. But I figured $5.99 might be worth it to end the aggravation. I was right. This price was agreeable to my test market--and later, to the market at large.

Packaging effectiveness. Yes, your packaging should be eye-catching; it should be aesthetically pleasing; and the design should represent your brand. But don't forget to effectively communicate your product's purpose. If it's completely new and different, your customers won't know what they're looking at on store shelves. Be sure to communicate your product's features and benefits quickly and succinctly on your packaging. Think of these questions when developing your packaging communication:

• What specific features make it unique?
• What problem does it solve for my customer?
• How will it make my customer's life better or easier?

Keep it short and simple. You only have about three seconds to capture a new customer's attention. You don't want the customer to lose patience or be overwhelmed by too much information.

Potential competitors. Find out from your test market if there's a product they believe solves the same one yours does--and if they're using it already. If so, what are its strengths? What does it lack? And what would make them buy yours instead? For example, dryer sheet fabric softeners have been around for a long time. A new invention--essentially a small spiked ball you throw in the clothes dryer--claims to work as effectively as dryer sheets. The two products may solve the same problem, but some may prefer one to the other. Perhaps some like the dryer sheets' scent while others are sensitive to its chemicals. This is the type of information you'll discover through market research.

Additional markets. Your research may uncover a market for your product you never considered. Take national electronics retailer Best Buy. Traditionally, the company targeted adult male consumers. But after research revealed an increasing number of female electronics buyers, Best Buy created an in-store experience that would better meet women's needs. With the TP Saver, my own research uncovered a market I'd never considered--pet owners. It seems dogs and cats take as much pleasure in manipulating the toilet paper roll as toddlers do.

So you can see why it's so important to do market research before investing too much in your product. Although it takes some time and financial resources, your discoveries can help set you on a more focused path and avoid expensive mistakes.

And for inventors with multiple ideas, gaining this knowledge and information is a great way to help decide which product to take to market first.

If you want help with your invention research and determining your next steps in the inventing process, check out our New Product Evaluation Program. You'll get a patent search and legal opinion, a review of manufacturability and marketability, a phone consultation with Tamara Monosoff and more!

Start Your Evaluation Now!

Excerpted from Tamara Monosoff's Entrepreneur.com article, "Researching the Inventions Market."