Targeting potential customers ensures that your money and efforts are used to tap the loosely created network effects of your current customers. That’s because 72% of them would share their experience with your brand with 6 or more people. Knowing this, it’s wise to target this organic spectrum rather than casting your net too wide with every customer on the radar.
Also, not all customers are the same. Someone who isn’t interested in your product or has a very bad customer experience may not be the right person to market to. On the flip side, knowing who your potential customer is would attract the right market and reduce customer acquisition costs.
In this article, we will understand what a potential customer is and how to identify potential clients via analysis.
What is a potential customer?
A potential customer is someone who is willing and has the capability to purchase your product or service. However, he is not your customer yet.
A group of potential customers is known as your ‘target audience’ to whom you market your product or service.
For example, Nike's potential customer is predominantly from the higher-income socioeconomic category. It nurtures a premium brand image with the above-average market cost of its products. The typical Nike prospective customer is a sports enthusiast who desires to live a healthy and active lifestyle, residing mostly in urban areas.
What are the characteristics of a potential customer?
You can distinguish potential customers from your available market by observing the below-mentioned patterns.
They are aware that a problem exists
Do you think a person who is not aware that a problem exists will invest in your product or service?
Your potential customer must be aware that a problem exists for which they will themselves look for a solution. You are more likely to close a deal if you project that you understand your prospective customer’s pain points and have a solution for them. For other customers, you have to constantly educate them about the problem, and that takes longer to close.
You have the solution to that problem
As a business owner, you cannot solve all the problems that a customer has. Therefore, it is important to keep in mind that your product or service has the ability to solve a customer issue.
Did you know that 62% of customers prefer to hear from marketers when actively attempting to fix a problem? As a result, your sales representatives must have the necessary product knowledge to propose a solution that meets the demands of potential consumers.
They have the ability to purchase
You may find a prospective customer who is aware of a problem that exists and that you can solve. However, they may not have the budget to purchase your solution.
58% of customers want to talk about the cost first. However, only 23% of sales reps do. To eliminate the chances of a wasteful sales process, salespeople should discuss prices first. If they do have a budget, then you can consider them as a good prospective customer.
They trust your brand
You will be in a better spot to convert your leads into solid sales prospects if you can build trust with them. For this, embrace continuous effort in branding via content marketing, social media and reviews. Strategize for word-of-mouth marketing to stay on top of the mind of potential customers.
What are the types of potential customers?
Broadly speaking, there are 3 types of potential customers:
Let’s understand each one of them.
These are the customers who blindly follow you, trust you and are always ready to buy from you. They usually recommend your product to others and advocate it. Simple measures like referral marketing would result in more customers in your kitty.
For example, Apple has a large base of ‘believers’ who line up to buy every new Apple product and advocate for them. This parody video showcases what Apple believers look like:
Skeptics are the opposite of believers. They are usually not your prospective buyers and are ready to protest everything that you do. Turning your product aspirational is a great way to counter and convert them.
For example, luxury clothes brands usually have a small base of believers and a large base of skeptics because their products are often beyond the customers’ budget. The same is for Windows PC users who state how Apple’s MacBooks are overpriced and not ‘worth it’.
Sideliners are those types of potential customers who haven’t yet decided whether or not they want your product. With enough marketing and outreach, you must aim to reach them first. For example, the upper middle class are often a sideliner segment for premium car manufacturers.
What is the difference between a potential customer and a customer?
While a potential customer is someone who hasn’t yet made a purchase but is willing to, a customer is someone who has already invested in your product.
Actual customer v/s Potential customer
An actual customer or simply a customer has already made a purchase from your brand. While the potential customer is yet to make a purchase but has the intent. Your goal should be to convert these potential customers into actual customers via various marketing and sales strategies.
Prospective customer v/s Potential customer
A potential customer meets certain criteria such that they could become your actual customer. While a prospective customer is closer to conversion such that they have a clear purchase intent.
For example, anyone with a high income can be a potential customer for a real estate firm in New York. But a customer who intends to settle in New York City due to work commitments is a prospective customer.
How do you identify a potential customer?
For identifying a potential customer, you can conduct a potential customer analysis. Briefly, there are three steps to conducting a potential customer analysis:
Identify buyer intent - Identify what features and benefits your product offers its customers. As an example, if a smart lock has a biometric lock system, that’s its feature and the benefit it offers is safety. Once you have done this, you will easily be able to find the common traits in your potential market.
Segmentation- Break your target audience into smaller user personas to whom you can tailor your services.
Closing strategy - Create an offer your potential customers would find hard to refuse. Here’s a video to further explore this sales topic in detail –
Athletic shoe manufacturer Nike has several market segments. They conduct behavioral, geographical, demographic, and psychographic segmentation. Based on that, their potential clients are people in the age group of 15-45 and are mostly in urban centres around the world. They also focus more on people who run only on ‘weekends’ or athletic women who are very particular about sports fashion.
Tips to make a potential customer choose your brand
Here are 4 quick tips to make potential customers choose your brand:
Discounts: Offer new customers hard-to-resist discounts and promotions
Personalization: Use predictive tools to personalize the customer experience across the buyer journey
Social Media: Buildd a relatable brand to engage with your followers
Customer Service: Ensure you resolve queries of leads to nurture towards a purchase
The key to converting potential customers to actual customers is to first focus on identifying them. Then, using concentrated marketing efforts, you can deploy your resources to improve your conversion rates. Get started with your potential customer analysis today.