Knowing and understanding targeted customers is the overarching rule of exceptional companies. Award-winning business builders know their customers as well as they know their own families, perhaps even more so.

They know, with exactness, the wants, wishes and buying behaviors of specific individuals. They have spent many unhurried hours researching, examining, assessing and understanding everything about prospective and current buyers of their products or services. They have analyzed the size of the market or the number of potential customers that fit the target profile. They know their names, ages, genders, incomes, home and Internet addresses, professions, education, associations, and marital status, number of children, hobbies, their tastes and interests. They grasp what they watch, read and hear. They understand their likes and dislikes. Knowing a customer to this depth is one of the key characteristics of highly successful business leaders.

Companies that possess this knowledge about their customers and use it to their profitable advantage are wildly successful. This unequivocal approach is simple and powerful. Knowing specifically what buyers want, savvy leaders can build and deliver the precise solutions to meet customers’ needs. They also offer their products at the right locations, at the right price and with the appropriate warranties. They deliver the right features and support to create positive buying experiences.

Conversely, leaders who don’t focus on their customers often fail. For some reason, they miss this absolutely critical aspect of their business; a relationship with those individuals who might buy their products. All too often, foolhardy entrepreneurs spend their energy on everything but having conversations with current and potential customers.

Consider the latest news from Kodak: The venerable 124-year-old manufacturer of film and cameras filed for Chapter 11 bankruptcy protection last month, following many consecutive years of negative financial returns. In 2007, its stock price was $90 per share. In January of this year, Kodak’s share price had sunk to a dispirited 76 cents. What happened to this bellwether global brand who had successfully placed film and camera products in the homes and offices of nearly every person on earth?

As we look back on the history of this formerly stellar firm, a picture of missed opportunities emerges. As excited customers were celebrating the arrival of fantastic digital images and digital cameras, Kodak management stayed the course with its traditional film and camera lines. Believing foolishly that its loyal customer base would never desert its famous products with the yellow and red logo, a somewhat arrogant leadership ignored Sony, Fuji and other innovative digital-camera firms.

In the meantime, groundbreaking competitors were happily capturing more and more of Kodak’s market share. Belatedly, Kodak finally began to pursue the wishes of its customers, only to find that sales were sinking rapidly. Sadly, instead of identifying the needs of its buyers and addressing them, management focused on patent litigation and cutting costs.

On the other hand, consider the crazy success of Skullcandy, a publicly traded company that sells amazing headphones to a specific target audience. I have watched this firm, launched by Rick Alden, since shortly after its inception. I was an early angel investor and am now a venture capital investor in this company that has become a darling of investors due to consistently fast growth. What has been its secret sauce for success? The founder knows his customers. He truly understands the needs of individuals who want his funky products. His target audience ranges from 12 to 26 years of age. They are hip. They love music. They ski, surf and skateboard. He knows what they wear from their toes to the tops of their heads. He knows they are, or want to be — cool and accepted by their peers. He knows what they watch and where they shop. He knows what apps they have on their cellphones and iPads. Look around your neighborhood at the youth on your street. They all have Skullcandy headsets or ear buds. In fact, they have multiple units. Around the world it’s the same. Kids from every country on earth are wearing headsets with a skull on it.

Need I say more? It should be crystal clear to all of us, that thoroughly knowing and understanding our customers and delivering what they want is the ultimate key to success. In conclusion, whether our sales are increasing, are flat or declining, we should, without fail, spend quality time with our buyers to understand what’s on their minds and respond appropriately. Let us be more like Skullcandy than Kodak.

Would you like to more? Do you have an experience to share or a question to ask? Follow my new Ask Alan blog at www.AlanEHall.com, or connect with me at @AskAlanEHall.

Alan E. Hall is a co-founding managing director of Mercato Partners, a regionally focused growth capital investment firm. He founded Grow Utah Ventures, is the founder of MarketStar Corp. and is the chairman of the Utah Technology Council.