In this article, Robert Gordman discusses how to advance your advertising career by recognizing different types of advertising customers and knowing which ones are the most valuable. To excel in your advertising firm and boost profits, you must focus on retaining ''core customers'' and attracting ''must-have'' customers. This allows you to use your time and advertising resources effectively. Gordman also discusses conducting online surveys to identify different types of customers. From this data, advertising professionals can better learn who their customers are and what they can do to improve business. All in all, advertising professionals can become better in their jobs and generate more business if they take the time to research and get to know their customers.

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	Robert Gordman is the president of The Gordman Group.

Businesses spend billions of dollars each year advertising to customers who don’t make a contribution to the bottom line. So it’s critical that you ignore what I call Opportunistic Customers and target advertising only to people who will provide increased sales and profits — your company’s Core and Must-Have Customers.

Core Customers are your company’s biggest fans. They love the products or services your company sells, and they’re willing to pay a fair price for them. Best of all, they can be counted on to make purchases again and again. Core Customers are loyal, easy (and inexpensive) to deal with, and stick with your company even after a promotion ends. They’re the famous 20% of the customer base that provides the equally famous 80% (or more) of profits. Over the long haul, Core Customers are the only ones who truly earn their keep — and they’re the ones who will guarantee a company’s future success.

Must-Have Customers are potential customers who look a lot like your company’s Core customers. They’re already buying products or services that are very similar to what you sell, and they’re paying similar prices. Must-Have Customers are the ones you need to convert to Core Customers. The only problem is that your Must-Haves are someone else’s Core Customers. Your company simply cannot survive long-term unless it’s constantly finding Must-Have Customers, taking them away from the competition, and turning them into Core Customers.

Opportunistic Customers see your products or services as commodities. They don’t care whether they buy it from you or a competitor, and they’ll pull out their wallets only when the price is right. They’re the infamous 80% of customers who collectively contribute 20% (or less) of your profits. And you’ll spend a disproportionate amount taking care of them. In fact, sometimes companies spend so much time and so many resources chasing after and servicing these customers that they wonder why they bother in the first place.

For instance, many opportunistic customers only go into a store when they can take advantage of a price promotion. In many cases this can increase sales volume, but it may actually negatively impact profits. And when the promotion is gone, so are the opportunistic customers. Yet Core Customers will keep coming back because they like your products or services no matter the price.

To build sustained, profitable growth you need to set as a goal the retention of loyal Core Customers, while attracting more Must-Have Customers. You don’t want to spend a lot of time and money trying to satisfy every customer such as the opportunists who buy from your company only when products or services are on sale. What’s really crucial is understanding what message and which media will effectively reach your Core and Must-Have Customers.

To create advertising that increases sales and profits, you need to know your Core and Must-Have Customers’ rules for doing business with your company. To do that, you need to ask them. Even small companies can conduct market research using online services such as Zoomerang. It’s critically important to confine research to Core and Must-Have Customers. Asking anyone else will taint the data and could send the company down a completely wrong — and potentially very dangerous — path. Be sure to ask “knock-out” questions to identify the customers you want information from as early in the process as possible. Getting all the way through a survey, only to find out that the person isn’t a Core or Must-Have, is a tremendous waste of time and resources.

Be sure to ask the right questions. In order to formulate the questions, it’s critical to have a good idea of the kind of answers the research is looking for. For example, if you want to know your Core Customers’ rules for doing business with your company, the research questions can be structured in a way that will produce information that can actually be used. Always use the “blind study” survey method so that the participants won’t know who is sponsoring the research and will give unbiased responses.

Questions that could be asked include:

• What products or services do you buy from (the name of your company)?
• Why do you buy these products or services from (the name of your company) rather than a competitor?
• What do you like most about doing business with this company?
• What don’t you like about doing business with this company?
• What other products or services could the company offer that would make it easier for you to buy from them?
• Which type of advertising causes you to shop at (name of the company)? Television? Radio? Newspaper? Email? Catalogs?

From questions such as these, you’ll hopefully discover that your products or services are a good fit for your Core Customers and will attract Must-Have Customers. Now you’ll know how to create advertising that tells your Core and Must-Have Customers that your products and services meet their rules.

The bottom line for your bottom line is this: When you know who your Core and Must-Have Customers are and what their rules for doing business with your company are, you can create effective advertising that will build sustained, profitable growth.

About the Author

Robert Gordman is the president of The Gordman Group (www.gordmangroup.com). He is the author of The Super Sweet Spot: Building Sustained, Profitable Growth and The Must-Have Customer: 7 Steps to Winning the Customer You Haven’t Got, which was named one of the “10 books you should have read in 2006” by Ad Age magazine. His clients have included senior management of Fortune 500 companies including Berkshire-Hathaway Retail, IBM PC Company US, IBM PC Company Canada, Kmart Corporation, KPMG, Saks Inc., VF Corporation, Weight Watchers International, and Whirlpool Corporation.

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