A truism in business is you need to know your customer well, the rationale being the better you know who you’re selling to, the more effectively you can communicate with them and the better you can tailor your offer.
In small business terms, you may know your clientele well; they may be repeat customers, you might know their name, how many children they have and what footy team they barrack for.
In service and retail businesses operating out of physical premises in small communities, this is often the case as the proprietor develops strong relationships with customers over time. For the rest of us though, especially those running web-based businesses and/or leveraging the internet as a way of marketing their brand (and isn’t that most businesses today?), then defining your customer can take a bit more work.
Some businesses fall into the trap of simply defining their market using demographic information.
They decide—sometimes with the benefit of research, other times on gut feel—they’re aiming for an audience of, say, men aged 39-55, married with two kids and who live in, say, the eastern suburbs, work in a white-collar profession and earn in excess of $100,000.