Knowing your customer

How well do you know your customer? If the answer is "I don't know," your business may be headed for trouble.

 

Ninety percent of business owners who can't define their customers end up folding, said Rodger Roeser, vice president for Justice & Young Advertising and Public Relations, who researches target audiences for clients. Whether it's a chain of 500 restaurants or a single-store operation, Roeser said there is no excuse to not know your demographics.

 

"Before you open your doors for business, you have to know your target audience," said Roeser, who represents White Castle and Graeter's Ice Cream. 

 

According to Scarborough Research, which measures consumer shopping patterns and media habits, the largest segment of fast-casual consumers are married caucasions ranging in age from 35 to 54 and have no kids, a group commonly called DINKs (dual income, no kids). Roeser said this segment wants quick, healthful food and a restaurant that is a good place to meet with other DINKs.

 

"Fast-casual consumers are educated, health conscious and are really big fans of the outdoors," he said. "These consumers are overwhelmingly white — 90 percent — and are split down the middle in terms of gender, and 38 percent own a home worth $100,000 to $199,000."

 

Often, operators create promotions to attract who they think their customer is rather than learn ahead of time who their customers really are. They make business decisions from gut feelings rather than research.

 

That's a story all too familiar for Roeser. Once he had to help a client who unknowingly set up shop 30 miles away from its target audience. "If you're going to expect customers to drive that far for a meal, it better be a great dining experience."

 

Problem was, Roeser's client didn't conduct an extensive demographics study before purchasing real estate and ended up in an area where the brand didn't resonate with customers. By the time Roeser showed up, the operator had executed several marketing campaigns.

 

"By not knowing your audience, you take a chance of marketing yourself as something you are not," Roeser said. "For example, Pabst Blue Ribbon would not try to market to Heineken's customers. Once the audience is defined, only then should marketing get involved." 

 

Roeser said a thorough demographics study costs $5,000 to 10,000. For operations not willing to hire a marketing research firm, he recommended consulting a local radio station or newspaper to study the area's population.

 

"Somebody in their marketing department should have the area's demographics, but they will also try to sell you on their advertising programs," Roeser said.

 

Denver-based Spicy Pickle knows its audience. Tony Walker, managing partner for the restaurant, said the company's customers are the same people shopping at Whole Foods, where women are the majority of its customers. The Spicy Pickle customers are 20 to 50 years old and have an average income of $50,000.

 

"Our customers are more educated than people who would go to Subway," Walker said. "But most importantly, they understand our food."

 

Spicy Pickle draws a predominately female audience with its Italian Artisan breads, 10 different cheeses, 21 salad toppings and 15 proprietary sandwich spreads.

 

"The women like us because they want healthy food quickly," Walker said. "And they will look all over for a good salad or sandwich. So if they like us, they come back."

 

The chain also has an inviting atmosphere, Walker said, with warm colors and soothing music. But more important, before they open a new location, they know who their customers are and where they live.

 

"Our core customers live in a three-to-five-mile radius of our restaurants," said Marc German, Spicy Pickle partner. He believes that if the food is good and you're near your target audience, the business will come.

 

In fact, because Spicy Pickle has created a cult-like following, people go out of their way to eat there. And these repeat customers can be attributed to quality demographic research before ever opening the doors, German said.

 

"We're not going after the blue-collar workers, and we don't belong in a strip center," he said. "We belong where the businesses are."