Associations have members, politicians have voters, charities have donors, hotels have guests, entertainers have audiences and Netflix has viewers. Call them by any name you like, but they are all customers—an aggregation of individuals who consume your product or service in exchange for some form of currency.
That currency may be time, dues, attention, trust, cash, a subscription, a vote or anything else that is commensurate with the value derived from what the “seller” is offering.
We are long past the days of one size fits all, we-make-you-take, three national television channels and “you can have any color car you like as long as it’s black,” the famous statement by Henry Ford in 1909.
In an era of endless options, 24/7 surround-sound advertising, new competitors entering the market everyday and increasing pressure to be individually relevant, how does an organization know its customer; what they like, what they want, when they want it, what they will pay and how they want it “delivered”?
There are six primary filters or screens through which you can identify, understand and know your customer. You can know your customer demographically, geographically, behaviorally, attitudinally, economically and, for business customers, firmographically.
So what do you do with these filters? Think of the last time you had an eye exam. The optometrist places your chin on a padded bar and flips those lenses around until you can see each line of the eye chart with ideal precision.
Think of these six customer filters the same way. You want to look at your customers through each filter and see each of them clearly, based on the characteristics that matter to what you’re offering.
This is the filter that you’re most familiar with—it represents the observable characteristics of a population or group of people, such as age, culture, height, ethnicity and gender. What products or services that you offer are most attractive to a customer based on demographic characteristics?
This filter involves segmenting your market based on characteristics of physical location such as proximity to your annual event or regional factors impacting your industry. What geographic characteristics matter to your audience?
This is the most predictive filter and one that’s easy to understand. Don’t listen to what people say, watch what they do. Are you tracking the behavior of your customers across every aspect of their relationship with you? We call this journey mapping. Watch their journey online, at events and on social media and you’ll know what they care about.
The attitudinal filter can be tricky to measure, but it is extremely powerful. What psychographic characteristics or attitudes do your customers exhibit? Are they conservative or progressive, empirical or free-thinking? What are their beliefs and values? These are the forces that drive behavior, the root cause of why we do what we do.
The economic filter is, obviously, all about the money. Who can afford what you’re selling, and are you tailoring your offer based on ability to pay? Mercedes-Benz wants to know who can afford their portfolio of cars so they don’t try to sell a $125,000 S-Class to a customer who is better suited to a CLA250 for $32,500. How much do you know about the economic profile of your members so your product development is focused on affordability?
This filter represents the characteristics of a business, the SIC (Standard Industry Classification code), number of employees, annual revenue, etc. If you have businesses as customers, you will serve them better if you cluster them based on common firmographic factors.
It’s time to wrap this up, but here’s a way to think about these filters. Profile yourself. Look at a product or service that you consume, and ask yourself how each characteristic of the six filters applies to what you do and why you do it. Do you buy a certain brand of soup for nutritional reasons (e.g. less salt)? That could be a demographic factor determined by age or genetics. Maybe you buy the soup because your mother bought it—that’s an attitudinal factor (nostalgia). Or maybe you are willing to buy soup at a local convenience store and pay 40% more—that’s a geographic decision. And finally, maybe you have the soup shipped by Amazon the third week of every month, that’s a behavioral characteristic.
When the soup company knows who does what and why, and then clusters these factors into customer segments, they can better serve each individual customer.
To learn more about your members or your customers, watch Who Is My Customer, the first in a series of videos I’m sharing on customer insights and segmentation.