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Entrepreneurship – from ideas to reality
Entrepreneurship – from ideas to reality

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1.5 Customer segments

Earlier you were asked to consider whether you are a typical customer. Customers come in all forms, and different customers will help you create value in different ways. This is important as your enterprise develops and grows – particularly with regards to listening to the ‘right customers’. Reinartz and Kumar (2002) suggested four customer segments. It is worth reflecting on these as you listen to your customers.

The customer Loyalty Model shown in a two by two matrix
(The Open University, 2018 )
Figure 2 The Loyalty Model

In an ideal world you would get answers to the questions posed in Activity 2 in Section 1.4 that indicate people do find what you are offering valuable, that they would buy it, tell their friends and get one every day regardless of the cost. However, this is unlikely to be the case. Through asking customers what they think, you are seeking answers about the market, and the competition in it, which might well provide the kind of vital information that leads to a pivot (Session 3).

Next you will consider the market your business will enter.