Identifying your ideal customer creates the foundations for all the other marketing you may do. In the second in this series of ‘Finding Your Ideal Customer’ we’re going to look at how and where you might find them.
YOUR EXISTING CUSTOMER BASE
The first place to look for your ideal customer is your existing base. Who do you enjoy working with? Which customers bring in more revenue? Conversely, who takes up all your time, but only spends a small amount of money with you with you? At this stage, it’s important to think about who isn’t your ideal customer as much as who is.
Think about the 80/20 rule. Most businesses have 20% of the customers bringing in 80% of the revenue. Look at your sales data as well as your customer data, so you get a wider view of which customers are more valuable over time. Also think about who has the potential to be an ideal customer.
There is one drawback of concentrating on your existing base - you will get more of the same and it’s based on what you’ve always done rather than what you could do, so you do need to look further afield
2. THE MARKETPLACE
The market place contains everyone who could possibly buy your product. Don’t just limit yourself to customers who buy directly from you, your business may also lend itself to other forms of distribution, a middle man, which creates a new customer for you to think about.
Consider the possibilities in the market place. Which parts of the market do you think you could reasonably reach and which ones are more of a stretch but you’d love to sell to them?
At this point you are looking to expand your ideal customer list., perhaps expanding the geographic reach, or a new age group.
3. THE COMPETITION
Look at who your competition are targeting. Here it’s not just about the direct competition, but also where else they could spend their money. For example, a direct competitor of florists, would be another florist, but customers also have the chance to grow their own flowers or buy different gift for a friend.
You may decide that certain customer groups are too competitive. whereas others are more open. You may also discover alternative customer groups that you hadn’t already thought of.
Having looked in three key areas, you should have a much better idea of who these ideal customers are, but before you settle on them, there are two more check points to get through, where you will start to narrow down to your ideal customer :
4. CAN YOU SOLVE THEIR PROBLEMS?
Here you need to look at the fit between what these customers want and what you have to offer. What are their pain points and can you solve them? Can you position yourselves as the right person to help them? What do you have that could convince them of this?
This question isn’t just about the positioning of your products and services it’s also about distribution (can they access your products) and price(is your pricing in line with their expectations?)
5. CAN THEY GIVE YOU WANT YOU WANT?
Is the group of ideal customers big enough? Can you get enough revenue? Will they keep you busy? If your overall purpose is to make a difference to middle aged men’s mental health, the older male market might be booming and lucrative, but it may not deliver what you want.
By considering these 5 areas, you will hopefully have expanded your thinking of ideal customers and then honed in on the ideal groups.
The next step is being able to describe your ideal customer in more detail and we’ll cover this in article 3.
If you’d like help finding and engaging your ideal customer, please get in touch using our contact form or email me.