Fact into insight
Following on from this post, currently, your list and your primary research are just a collection of facts. To turn this into insight, we need to closely examine the information. We cut up our information like a pie.
For example, I might tell you with certainty that you have 90 female customers aged 25-34 years old. In isolation, you might think that’s a great result, but in fact it’s meaningless without context. How do we turn this fact into insight?
Let’s look at an example customer list. This business has a list of 2,105 customers and have products and service suited to a younger market. I would first divide it up into gender and age brackets.
Many people find it hard to read a table of numbers like this, so I put the numbers in a graph. This graph is created in Excel.
What do you notice about the age group female customers aged 25-34 years old?
Gap in the core market
Can you see the gap? The female customers aged 25-34 years old is not performing well compared with other gender and age groups. This business could capture another 150 or so customers. It appears that this is the business’ CORE MARKET - see how males in the same age group are the largest group of customers? However, without analysing the list and reading the graphs, this business owner may never be aware of the profit they are foregoing.
We can also look at the list in several different ways. For example, ratios of males to females, pie charts and totals.
Ratio: For every 1 female, there are x males
This could also be presented using icons. I built the same information in Photoshop below. It’s a little more interesting than the excel version, but took me eight times as long to build (and I’m good with Photoshop).
Looking at the pattern, we should have an expectation that female customers aged 25-34 years old should be a very similar number to male customers aged 25-34 years old, especially when considering it is that pattern in other age groups.
You might argue the same thing happens for the 75+ age group. However, the business owner only has 40 customers aged over 75 years old and 410 aged 25-34 years old – and we learnt earlier that this business generally caters for the younger market.
The 25-34 years old are the business’ core market where efforts should be placed to foster future growth.
Have a look at pie graph below which shows the percentage break-up of the total customer list ages. Can you see that the 25-34 years old age group makes up 19% of the business’ customers while over 75+ only makes up 2%?
Many people would assume that we should focus on a small section of the pie and build it up. It is generally a better tactic to focus on customers who are like your best customers. This is commonly referred to as ‘picking the low hanging fruit’.
In this case, the customer group with the best representation is 35-44 years old at 26%. To foster future growth, this business owner could focus firstly on the 25-34 years old, then 45-54 years old.
In the longer future, they may start looking at 15-24 years old and over 55s, and this may require a specific strategy such as diversification of products and services. Attracting new markets often requires significant investment.
Identifying the target market
We can determine that the female 25-34 years old and the male and female 45-54 years old age groups this business’ TARGET MARKET. The target market is where investment in time, money, and trial and error is made.
Asking the Right Questions
We’re not finished there. Now we ask WHY are these groups under-represented in this business? HOW do I get them back into this business? So, like a detective, we go in search of more information which we will do later in this section.
Now we have a much better idea of who we are targeting, we can use qualitative and quantitative techniques to ask excellent questions. I’ve given a very brief example of questions you may ask and remember that these are just a tiny, tiny example of the wealth of things you can do and your groupings.
Download: Mind Map for Analysing Quadrant 1
Next: Refined Focus for Profit Clarity, Quadrant 2 | People on the Outside