There are three questions that every business owner should be able to answer for themselves. Asking yourself the right questions and knowing the answers to those questions — or at least knowing that you should be a looking for them — is a great way to determine that you’re on the track.
So here are three great questions that every business owner should be able to answer:
Who is your target audience?
What is the complete customer experience?
How is success measured at your company?
1. Who is your target audience?
This is probably the most fundamental question you need to answer when running any business. Who am I selling to? Is your answer really vague? “I’m selling to men.” or “I’m selling to Americans.” If that’s the case, you need to go back to the drawing board.
When I studied marketing in college, the first thing every professor taught us was that you must segment the market. Think about it. The more granular you get and the more you can segment the market and identify your ideal customer, the better you can target that customer in your positioning, designing, building, and marketing efforts.
Are you a furniture brand going after a younger audience who may have less money to spend, but wants a more stylish product? You probably need to focus on mass production and something that can be mailed to customer and easily assembled by them. Your marketing should emphasize style and cost, and you should advertise on platforms like social media where a younger audience spends more time.
Conversely, a high-end sports car maker probably wants a bespoke, hand-made product where each vehicle is unique. Their clients likely value exclusivity. They might get the word out about their car by word of mouth through connections in an existing high-end car community.
In both cases, knowing your target audience is critical and, in each instance, very different approaches need to be taken to be successful. So make sure you’ve asked yourself exactly who your target audience is and think about how best to market directly to them.
2. What is the complete customer experience?
If you own a business, you should know what your business is putting out and how the end user of your product or service uses it and thinks of it. In other words, what is the complete experience that the customer is having?
A computer company, for example, should have an employee go through the process of buying and setting up one of their computers in their own home. They should see what the buying experience is like.
Do the marketing materials answer the right questions? Is the retailer selling the computer to the end user positioning the product well in the store? Are their sales people supporting your efforts or undermining them? Is the setup experience easy? Can their spouse set up parental controls without much effort? Can their children do their homework on the computer? Is it prone to malware or crashing?
Understanding the path that your customer takes and how they are impacted by their interactions with your brand and your products is important. If you don’t know that the retailer selling your computers is telling everyone that the price is too high and they should buy another product, then you can’t go about finding a way to fix that problem.
3. How is success measured at your company?
One thing everyone in your company needs to know is how success is measured. If people don’t know whether their efforts are successful, they could be over- or under-confident and make poor decisions.
Imagine a product manager who thinks that he’s successful in his job because the product he has put out is profitable. He may think that he’s doing a great job and he will coast along. His supervisor may see it from a different perspective. What if while his product is profitable, it’s the slowest selling product in its segment. His supervisor might see him coasting along and think he isn’t serious about their product, so she lets him go for poor performance.
This is really a mismatch of expectations being brought about by the fact that the company hasn’t adequately communicated or decided on how success is measured. Such metrics need to be decided on and communicated at a company, department, and employee level.
Everyone in the company needs to know if the barometer for success is profit margin. Every department needs to know if quantity, quality, customer satisfaction, or fewer products being returned by customers is what success should look like for them. And each employee should know if their success hinges on quality output, coming up with new ideas, or simply showing up on time and putting in enough hours.
When everyone in your company knows how success is being measured they have a concrete direction they can work towards. They can focus their energy and be more driven to succeed.
So whether you’re starting a new company, fixing a struggling one, or looking to build on past successes, asking yourself the right questions can be a great way to candidly assess your business and begin figuring out how to get it to where you would like it to be.