New Customers in Existing Market

April 13, 2006

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You can grow an existing business by going after new customers who are in your area but who don't do business with you. There are lots of ways to do it. For example, you might change your pricing structure to reach up or down the economic ladder, or advertise in a different medium. But before you take the steps necessary to reach that new audience, a business plan can help you evaluate if the increase in business will justify the time and effort you'll expend.

How do businesses reach new customers? Some offer new products or services that appeal to people outside the existing customer base. The fast food chains did this when they began offering a wide variety of food outside the standard fare. A person who would never eat a fried hamburger might be willing to have a salad.

Fast food chains and others also try to attract new customers (and retain existing ones) by establishing drive-through service. Now, people who were unwilling to deal with parking are potential customers. The risk that the restaurants took was large. They had to redesign food preparation and service areas, install new equipment and fixtures, and completely alter the traffic flow through the parking lot. They didn't take the risk without carefully assessing whether the costs and required changes in operations would be worth it.

Are there people who never ate fast food before they could get it without leaving the driver's seat? Probably. It might not seem like a great basis for differentiating a group of people, but you can use a business plan to assess all the foibles of your potential new customers. You might be surprised at what you find.