Importance of Knowing Your Customer (KYC) Strategy for businesses

Companies have changed their focus from production and sales orientated strategies to marketing and customer oriented strategies. These days making a marketing plan that is worth attracting the customers is one of the most important things for any business. Companies spend a lot of money in planning their marketing strategies. And it is a good marketing strategy which plays the major role in the success of any product or service. To make people use a product it is important to give them knowledge about it. Suppose there is a new product coming in the market. The company launching that product will bring in the knowledge of customers that this product exists. And they can only do this by making an intelligent marketing plan.



Where it is important from the marketing point of view to focus the right target market and make proper strategies for pricing, placing and promoting your product another important concept which need to be understood is the KYC strategy. KYC means Know Your Customer. Businesses expand and start their operations overseas and become multi national businesses. For any business therefore it is important to have the knowledge that who their customers are. Businesses need to understand the language, tradition, culture and ethics of the people where they are operating the business.



Planning to sell a product that is anti cultural or anti ethical to the people can cause serious problems and cause loss in the business. Planning to launch a liquor brand in Muslim countries could be an example to it where liquor is prohibited in the religion and against the culture too. Similarly offering Chicken pizza’s in countries where people are vegetarian would be a bad option. There are a lot of examples where the marketing strategies failed to produce some results just because of not following know your customer strategy.



Same is the case with understanding the language of the market where you are about to launch your product. A few years back when KFC launched its slogan in China "finger licking good" they translated it word to word in Chinese which meant "eat your fingers". After realizing the mistake they had to modify the slogan in Chinese language and correct it to finger licking good again. Another famous example of not knowing the customer is by a soft drink company in an Arab country. They placed a sign board which showed three pictures. At the extreme left was a picture of tired man lying on the desert sand. In the middle picture the man was drinking the energy drink and in the third picture at the extreme right the same man was running. That soft drink company wanted to show that after drinking their product the man got hold of his energy and started running. But they forgot that the Arabs read from right to left. According to the perception of Arab’s the person was running then he took the energy drink and died.



Companies now study the culture, tradition, religion, language and ethics of the market where they want to launch their products. They modify their products according to their customers and make profit. Therefore, knowing the customers in terms of their culture, tradition, ethics and language is very important for any business. Businesses which do not follow this strategy have to bear losses.