What is a potential customer? Definition and roles of potential customers

What is a potential customer - Definition & Analyzation

Potential customers are often mentioned in business meetings, marketing strategies, plans, researches, surveys... Therefore, in this article, we are going to analyze the definition and roles of “potential customers”.

Definition of potential customers

What is a potential customer?

A potential customer is someone who has needs and wants which can be satisfied by products/services of an enterprise, but he/she has never bought those products/services.

There are many reasons to explain why a potential customer has never bought products/services supplied by a business:

  • The customer doesn't know about the existence of the business or those products/services.
  • The customer has chosen the same products/services supplied by competitors.
  • The customer hasn't chosen those products/services because he/she doesn't believe in their quality.
  • The customer hasn't bought those products/services because he/she cannot reach their point of sales.
  • And many other reasons...

Khách hàng tiềm năng

What are differences between potential customers and target customers?

Both "potentials customers" and "target customers" are basic terms used in Marketing. However, how can we distinguish potential customers from target customers? What are the differences between the terms?

Potential customers Target customers

- They have needs that can be met by products/services of enterprise but haven't bought those products/services because of some reasons.

- They are identified by marketing researchs.

- They are customers targeted by a business marketing strategy.

- They are identified by market segmentation and market targeting.

- Target customers can include potential customers and actual customers

Roles of potential customers in Marketing

What are the roles of potential customers in Marketing?

Potential customers can be seen as a key to expand a company's market share

When talking about expanding a market share in a business, what do you think about? Yes, we often think about expanding the business coverage to reach more customers, or improving the business's product quality to attract customers who are using competitors' products.

The number of potential customers in the market is limited. A potential customer of “A” enterprise and true customers of  “B” enterprise. Therefore, when "A" enterprise successfully persuades potential customers to buy a product or use service of them, market share of B enterprise will decrease.

Potential customers show what a business lacks

When figuring out reasons why potential customers haven't bought marketing offerings supplied by a business, the business may know what it lacks for its competitive advantages (product quality, price, supply chain, promotions...).

Methods of identifying potential customers

How to identify potential customers of a business?

Conducting marketing researches

Conducting marketing research is a traditional and effective way to identify most potential customers. By collecting secondary data from the internet and documents, getting primary data by observation, survey, interview... a company can calculate how many potential customers living in a geographical area.

Checking the records of sales histories

There is one thing that we can be sure of: the conversion rate of a sale over a given period is always less than 100%. In the other words, if there are 100 customers to your store (both online and offline methods) on one day, the number of customers who decide to buy your product is always less than 100. The number of customers who haven't decided to buy are potential customers of your store. Of course, your business has to increase conversion rates to potential customers become true customers.

Observing competitors

In fact, actual customers using competitors' products are potential customers to the business. Knowing that, it is difficult to persuade these customers to switch to another company's products, but it is still possible because they always aim for products and services that make them most satisfied.


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