Do you know precisely who your customers are? You may know many of them by name, but do you really know what type of people or businesses they are? For example, if you sell to consumers, do you have demographic information (e.g., what are their average income ranges, education, typical occupations, geographic location, family makeup, etc.) that identifies your target buyer?

What about lifestyle information (e.g., hobbies, interests, recreational/entertainment activities, political beliefs, cultural practices, etc.) on your target buyer?

This type of information can help you in two very important ways. It can help you make changes to your product or service itself, to better match with what your customers are likely to want. It can also tell you how to reach your customers through advertising, promotions, etc.

For an obvious example, a company that sells athletic shoes may know that its typical customer is also a sports fan. Thus, if it can build shoes good enough to be worn by professional athletes, it will have a convincing story about quality to tell. It can also benefit by using well-known athletes as spokespersons in its advertising, and by placing advertisements in sports magazines where its customers are likely to see them.

How can you refine your understanding of your own customer base? We suggest that you look at the issue from two angles:

• niche marketing— identifying the heavy users of your product so you can direct your marketing efforts more precisely to those users
• segmenting the market— dividing the existing market up into sections or segments that may become new niches for your business