Knowing Your Customers: Market Research

What You Will Learn

• Define a target market and describe an ideal customer
• Gather information through simple, low-cost research
• Identify competitors and what makes your business different
• Write a value proposition in one sentence

Lesson Notes

Who Is Your Customer?

Your target market is the specific group most likely to buy from you. "Everyone" is not a target market; "busy working parents nearby who need weekend house cleaning" is. Describe your ideal customer: who she is, what problem she has, what she values, and where she looks for help.

Simple Market Research

Market research is learning before you invest, and it can be free:

• Talk to people. Ask about their problem, not your product: What is hardest about this? What have you tried? What did it cost?
• Observe what businesses are busy and what people complain about.
• Read free library and local business center resources (your instructor will list them).

People are often polite about ideas; ask what they actually do and pay for now.

Competitors and Your Difference

Competitors are any other way your customer solves the problem, including doing it themselves. List who they are, what they charge, and their strengths and weaknesses. Your difference might be reliability, a specialty, flexible hours, or serving an overlooked neighborhood. Never speak falsely about a competitor.

Your Value Proposition

A value proposition tells a customer why to choose you: I help [customer] with [problem] by [what you do], so they can [benefit]. Example: I help busy families keep their homes peaceful with reliable weekend cleaning, so they can rest on their days off.

Key Terms

In-Class Activities

Customer Interviews

Using the five interview questions on the worksheet, interview two classmates as if they were potential customers for your idea. Record their answers. Do not record names or personal contact information. Write one thing that surprised you.

Competitor Table

List three competitors or alternatives for your idea (from your own knowledge or the printed local directory). For each, write what they charge (estimate if unknown), one strength, and one weakness. Then write how you will be different.

Assignment: Customer Profile and Value Proposition

Write a one-page customer profile and value proposition:

• Describe your ideal customer (who, where, problem, values, where she looks for help).
• Summarize what you learned from your two interviews.
• Complete your competitor table and name your difference.
• Write your value proposition using the sentence formula.

Graded with the Module Assignment Rubric.

Reflection Journal

Proverbs 27:23 tells us to know the state of our flocks. A good business owner knows her customers' needs. Jesus came not to be ministered unto but to minister (Matthew 20:28). How could serving customers' real needs be an act of love?

Prayer focus: Ask God to give you a listening heart and eyes to see the needs of others.

Listening Before Selling

A business does not succeed because the owner loves her idea. It succeeds because customers need what she offers and are willing to pay for it. That is why good owners listen before they sell.

Proverbs 27:23 tells the shepherd to know the state of her flocks. In business, that means knowing your customers: who they are, what troubles them, what they value, and where they look for help. You find out by asking good questions and paying attention.

Listening is also a form of love. Jesus often asked people what they wanted before He helped them. When you ask a potential customer about her struggles and really listen, you treat her as a person, not a sale.

Renee was sure her neighborhood needed a lunch delivery service. When she asked around, she learned that what working parents really wanted was help with after-school snacks and rides. She changed her idea and found eager customers. (Renee is a composite example.)

Think About It

1. Who is the customer you most want to serve? ______________________
2. What question could you ask to understand her need? ______________________
3. How can listening be an act of love in business? ______________________

Daily Devotions for Week 3

Know Thy Flocks

Be thou diligent to know the state of thy flocks, and look well to thy herds.— Proverbs 27:23 (KJV)

Good owners know the people they serve. Diligence includes paying attention.

Reflect: Who are the people you will serve?

Pray: Lord, help me know and care for those I serve.

Do: Write a description of your ideal customer.

Hear Before Answering

He that answereth a matter before he heareth it, it is folly and shame unto him.— Proverbs 18:13 (KJV)

Listening first prevents foolish mistakes, in business and in relationships.

Reflect: When did listening first help you?

Pray: Lord, make me quick to hear.

Do: In one conversation today, listen fully before you answer.

The Things of Others

Look not every man on his own things, but every man also on the things of others.— Philippians 2:4 (KJV)

Serving customers means caring about their needs, not only your goals.

Reflect: What need around you could you meet?

Pray: Lord, open my eyes to the needs of others.

Do: Notice and write down three needs you see this week.

Many Counsellors

Without counsel purposes are disappointed: but in the multitude of counsellors they are established.— Proverbs 15:22 (KJV)

Asking many people strengthens a plan. Market research is gathering counsel.

Reflect: Whose input could strengthen your idea?

Pray: Lord, send me wise counsellors.

Do: Ask two people what they think of your idea and listen closely.

Came to Minister

Even as the Son of man came not to be ministered unto, but to minister, and to give his life a ransom for many.— Matthew 20:28 (KJV)

Jesus came to serve. A business built on service follows His pattern.

Reflect: How will your business serve rather than only take?

Pray: Lord, make me a servant like You.

Do: Write how your business will make a customer's life better.