Biz Talk: More Than Just Statistics

While we were in the process of formulating our business plan for a bakery in San Leandro in 2006, we consulted demographics data on Wikipedia’s San Leandro page to get an idea of our customer base.

According to the U.S. Census Bureau, the city's per capita income was $23,895 at the time, while the median income per household was $51,081. There were 93.1 males for every 100 females and the median age was 38 years.

Using these figures as bases for sales forecasts and market share may be good initially, but keep in mind that you may have to continually adjust based on customer feedback and suggestions because figures are just numbers, not faces. Customers are persons with varied preferences and moods. 

For instance, it would not be very accurate to assume that all working females, age 40, married, with at least two children and earning an average of $50,000 annually would be willing to spend $50 monthly on desserts alone.

As you deal with customers every day, you will learn about some details you might have overlooked during the business planning stage. Although our bakery café’s* location was very accessible, it was not very visible. There were three tall trees blocking the view from Hesperian Boulevard. There were motorists passing by right in front every day who didn't even notice our store.

Some of our regular customers had been telling us about the blocked view problem but we kept ignoring it until friends whom we invited to stop by told us that they had to drive back and forth until they found the store. “Blink and you’ll miss this coffee shop,” said one review about us. We may have missed a lot of potential customers before we decided to do something about that problem.

While still employed, Danny of San Leandro Foot Spa, kept hearing his relatives, friends and co-workers complain about back pains and all kinds of body aches. Some of them couldn’t get chiropractic care because it was too expensive and they had no health insurance. 

“I started taking body massage classes and experimented on my mom, who felt some improvements after a while," Danny told me. "She was eating well and sleeping better. So I thought of opening this business, which is a cheaper alternative to chiropractic care – just $20 for a full body massage for one hour. Our business is doing well despite this tough economy.”

Their regular customers have significantly increased since they opened two years ago.

Listening to your customers is the key to knowing what they want and understanding what they need.  They have to feel comfortable dealing with you so they will keep coming back.  Most customers, especially women, make their purchasing decisions based on emotions.  Sometimes you have to gauge their mood to be able to sense how they would react to what you’re going to say.

Although statistical data can help you with your financial strategy, you need to constantly get customer feedback to build your marketing strategy.  Sometimes you will find out that the customers you were targeting are not the ones who would actually purchase your product.  The earlier you can make adjustments, the sooner you can save your bottom line. 

*The bakery cafe business was sold in 2007.