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Defining your target customers means identifying the specific needs (“pain points”) and characteristics of the consumers or businesses who you believe will buy your product. This demographic profile for end-user customers can include age, gender, income, occupation, marital status (and family), hobbies and interests. For business markets, you would look at a particular profile, including industry, revenue, location and number of employees.
In general, determining the exact demographic of your market starts by contacting prospective customers to see if they have a need that your company solves … and the money to solve it. There’s a certain amount of guesswork along with trial and error to refine the targeted customer. Try to be as specific as possible. If you can narrowly define your customer demographics, that’ll make your sales and marketing tactics easier and increase your chances of success.
One thing you should do when homing in on your target market is to ask current customers and employees what your company does. Do they have a clear, common or compelling answer? Too many entrepreneurs may focus on what they want to offer customers, not what those customers actually want to buy. Remember that consumers tend to buy when they are in pain (that is, have a great need) and have the money to relieve that pain—people often buy painkillers ahead of vitamins. Part of the reason your sales pipeline is empty could be that you have failed to narrowly define your business offering in terms of the pain you can heal for customers.
To identify who your ideal target market is and what these consumers need or want, consider the following:
1. State the critical problem that your business solves for customers. Complete the following sentence: “My company helps _________ who are _________.” For the first blank, fill in the customer you’re targeting. In the second blank, fill in the problem your company specifically solves. For example, my brand is: “My company helps small-business owners get unstuck.” Similarly, “Acme Heating and Cooling helps homeowners whose heat is broken.” And “Becky Smith helps parents whose children don’t sleep well.” These are all focused explanations on how these companies are solving a problem.
To test your original ideas about what your target market is, go out and offer your product or service for sale at the intended price. Do those customers actually buy it, or do they say “no” or, worse, “maybe”? In this exercise, anything short of a “yes” from a paying customer is a failure. If you’re not successful here, brainstorm with your team all “adjacent pains” that your business is solving. Sometimes the biggest customer need is not the most obvious, and you may need to pivot once you get more clarification on who the target market is and what they really need.
2. Why is your company the best? If that initial test indicates your original ideas about your market might not be completely on target, consider the following sentence: “My company is the best at _________.” Many companies will say customer service, but this is probably not a differentiator because so many small businesses promise this, and few may be truly able to deliver. A good way to get this answer is to ask any current customers why they chose to buy from your company. Ask them why they do business with you and not with a competitor.
3. Test the brand in front of your employees and customers or prospective customers. Does your brand ring true for both of them? Do your products and all your actions around it truly reflect your brand inside and outside the company? Many companies say their brand is one thing, but their actions may not reflect it.
4. Practice your pitch. Can your entire team state your brand and know who your perfect customer is? Teach all employees the exact answer to this question: What does your company do?
Find the Perfect CustomerOnce you’ve gone through the exercise of identifying your perfect prospects, you need to find them. To do so, you should be where the conversations are. Where are your potential customers discussing their issues and problems?
Search engines. Use keywords to search for customer problems that your company targets. For example, if your company repairs cars, search for phrases such as “When is a car considered totaled?” Then, comment on discussions that are happening within those search results.
Set up Internet alerts. Use Web alerts to get notified when new content appears in these areas or when someone mentions your company. Free alerts are available through Google Alerts or TalkWalker.
Industry magazines, blogs, podcasts or forums. Find out what the most popular and active communities are in your industry and find ways to inject yourself valuably into those relevant conversations. (These can be found through Internet searches, trade shows or social media referrals.)
