Customers, the awareness of their needs, the consideration for the customer’s wishes and the inclusion of their demands in marketing strategies are the four pillars on which stands the success of any business.
The world of business revolves around the idea of selling but would anyone want to buy the products one doesn’t need or doesn’t believe they need? Well, the answer is an obvious “No”. However, no company can create bestselling products and services if they do not know their customers, right? Therefore, in order to sell any products or services to the customers, it is important to know their needs or demands first. This means that “Knowing your customer” is the first and foremost step towards a successful business endeavour.
According to Peter Drucker, an eminent business thinker and writer,
“The aim of marketing is to know and understand your customer so well the product and the service fits him and sells itself.”
This idea of getting to know your customer and providing him/her with a sense of familiarity is crucial for the success of any business especially in the digital world of the twenty-first century where every year more than 2 million MSMEs are established. As the number of companies rise, so does the competition. “Kowing your customer” or commonly know as the KYC helps the companies understand their customers better and track their interests by monitoring their purchases. Although KYC also helps companies verify their customers, it is majorly used to keep a track of the customers, their financial transactions with the company or the brand and for creating a loyal customer base by bestowing the customers with loyalty programs and certain reward points.
KYC has now become a mandatory procedure and it helps filter out the suspicious entities. From the business point of view, it definitely does provide a sense of security and is surely an impressive business practice. It helps the company keep a track of the number of customers it has, how often they buy the products and services, what age group they belong to, what products or services spent on and what their age is. It helps define the potential customers who are most likely to splurge on the items your company has to offer.
The most interesting thing is that KYC enables the company to get feedback from their customers which earlier could not have been possible. Also, the tiny rewards that the company bestows on its customers are well appreciated and create a loyal customer base. These rewards sometimes vary from reward points to extra % off or both on birthdays or special occasions. And so contrary to general belief, KYC actually benefits not only the business organizations or companies but the customers as well.
KYC has proved to be a boon for business organizations and can really increase the companies profits if used dexterously and effectively.