A lot of material about how to start a business (including this blog) will talk about the concept of an ideal customer. This concept is talked about widely in marketing and product development, but it is also key to all parts of your business. But why is it important to know about your ideal customer, and how do you decide what your ideal customer is?
Why Is It Important to Identify Your Ideal Customer?
It seems a little counterintuitive to focus on one type of customer; after all, isn’t the goal to try and sell as many products as possible? But, focusing on one ideal customer can help you streamline every aspect of your business. You can develop a product that addresses pain points and pleasure points for that customer type. And you can market your product in ways and places that will grab your ideal customer’s attention.
When you don’t have an ideal customer type, you end up spending a lot of money trying to please everyone. You spread yourself too thin over a number of features and benefits and end up confusing your message. It is much easier to market to one type of customer. Other customers may end up buying your product too, but your ideal customer type will rave about a product that feels like it was made especially for them. (And it was!)
How to Identify Your Ideal Customer
There are a number of different ways you can identify your ideal customer. We will break these down into 2 categories:
- Before you’ve launched
- After you’ve launched
Before You’ve Launched
If you have not yet launched your business, then you get to dream up your ideal customer. But this is not a wishlist where your ideal customer is a millionaire who invites you to parties on their yachts. This is the type of person you want to design your product for.
Let’s say you want to become a business coach. What kinds of business owners do you want to work with? Ideally, pick people like you because you can approach them as someone who has been there done that. For example, you could become a business coach for entrepreneurial mums. You’re a business owner mum and know how difficult it can be to juggle looking after kids and running a business. Both are very demanding on your time. By narrowing down your niche, you can create and market a product that is attractive to your clients. You might have a business strategy that takes only 5 hours per week to maintain once it has been set up. That would be extremely attractive to your ideal clients because they are time-poor.
If you’re stuck for ideas, find similar products to yours online and read through reviews to find a customer type that isn’t having their needs met. Alternatively, jump on Reddit and see if anyone is having issues with your product or industry. Find a problem and create a product or service that is tailored to that customer type, thus providing a solution.
After You’ve Launched
If you have already started your business, then you have plenty of data on the sales you have already made. This is great because you can identify the most profitable customer type and cater to them.
In his book Pumpkin Plan, Mike Michalowicz tells you to assess your client roster to look for the following things:
- Clients who bring in profit
- Clients who are a joy to work with
Look only at the clients that hit the sweet spot of having both of these attributes. You don’t want your ideal customer to be one who brings in lots of profit but is a nightmare to work with. If you need to grade your clients to find the top 1 or 5 (depending on your business size) then do so. Obviously, this would be a list you keep to yourself.
Once you have narrowed your client list down to a handful of clients, look at what they have in common. Examine their business model and what they sell. Don’t be afraid to reach out to your clients and ask to get to know them. Find out why they buy from you and how it helps their business. This will give you a lot of information, some of which may be surprising. They may use your products in unexpected ways.
What Now?
Now that you’ve identified your ideal client type, you should cater to that client type in everything you do. Think of some of the following things:
- How can you set up your business in a way that best serves your ideal client type?
- Where does your ideal client hang out? (where should you advertise?)
- What does your ideal client need from your product or service?
- What types of messaging will catch your ideal customer’s attention?
Knowing your ideal customer is just one piece of the puzzle; figuring out how to create an amazing customer experience for your ideal customer is an ongoing journey. You should constantly review and refine as you grow.