Editor's note: This article written by Alan Hall originally appeared on Forbes.com and is being reprinted with his permission.
Great business builders are fanatical about growing their companies. They spend time every day thinking about how to 1) engage new loyal customers to replace those who have vanished and 2) find new clients to increase their pool of shoppers who will increase top-line revenues.
Each year, American companies must replace on average about 10 percent of their client base for various reasons, including customers who move, customers who find new solutions from competitors or customers who no longer have a need for a given product.
Business leaders must regularly increase gross revenues by adding more and more buyers who will purchase their solutions to remain viable and profitable.
Recently I spoke about entrepreneurship to a gathering of small business owners and aspiring dreamers over 55 years of age at the Kellogg School of Management at Northwestern University. After my speech, there were numerous questions ranging from the sources of money to the hiring of new employees.
Ed O'Brien, owner of Bountiful Eatery, a healthful food restaurant in Chicago, asked what he should do to increase the number of customers. He estimated that he needs to find at least 30 more regular customers to break even.
"How should I proceed?" he asked. I began my response by asking him to define who his customers are. "Tell me everything about them," I said.
"Well sir, they are typically females, from 26-45 years in age, married, with small children, educated, living in nearby apartments, healthy and they love yoga classes. In addition, they like to eat nutritious food and they tend to eat at my restaurant once a week."
"Great start, Ed. Do you know what they watch, listen to and read? Do they use the Internet? Are they on Facebook? Do they tweet?"
"Frankly, I don't know the answers to your questions," he said.
"Let me suggest, Ed, that you host a focus group with a few of your customers to learn more about them. I can guarantee you will learn substantially more about how they think and act."
Based on this suggestion, O'Brien asked his public relations coordinator to host such a group of customers at his restaurant. I spoke with him recently about the event and what he learned. "Ed, what happened?"
"Alan, we used social media to contact our customers via email, Facebook and Twitter and invited them to participate in an informal discussion about our business. Happily, eight individuals participated. There were six females and two males; a fairly true representation of our clientele.
"We asked them questions about our current menu, our home delivery service, their favorite meal, kids' food and new food items (we actually served them these new offerings) and asked what they would want us to add to the menu. We asked how they discovered us. We asked if they are pleased with our business and what they would change, if anything.
"Surprisingly most answers were very positive," he continued.
"They did suggest, however, that we add warm bowl items, such as brown rice and quinoa, plain and with meat. They also recommended that we add booths for eating. Currently we have only free-standing tables.
"By the way, Alan, I didn't attend the focus group meeting. My public relations representative, Danielle, hosted the gathering and typed the full conversation for me. She also collected a written questionnaire from each participant. Since then, I have been able to read the full transcript and study all of the responses.
- Gary (and Rose) Neeleman: Q and A with a...
- Bad Santa? 5 tips to tackle your holiday gift...
- What are people gifting this year? Data from...
- Should toy marketing be gender neutral?
- Low gas prices are great, but could be...
- Guaranteeing results: College sees small, big...
- Selling gold, precious metals part of...
- More 'Help Wanted' signs up at small businesses
- BBC exposes inhumane working conditions... 6
- Sony announces limited release for 'The... 5
- Survey finds fewer women working now... 5
- Should toy marketing be gender neutral? 3
- Low gas prices are great, but could be... 3
- US home sales dropped sharply in November 1
- US consumer spending up solid 0.6 pct.... 1
- Guaranteeing results: College sees... 1