Who is Your Ideal Customer?

By Sandra Collins

This blog is about identifying your target markets.

 

A “target market” is a group of people with a set of similar characteristics who would benefit from your products and/or services. Defining a target market helps you to articulate the benefits your products/services provide.

In some cases, you will have multiple target markets. Some companies find it clarifies their understanding to define what marketers call “personas.” Each persona is a description of a particular type of person with particular needs.

Articulating personas and target markets helps you target your messaging and communications and increases the effectiveness of your sales process. The more narrowly you are able to define your target markets, the more specifically you will understand their needs and the more specifically you can let them know how you can help them.

It’s possible that the target market of people using your products/services will be different than the people who make the decisions about purchasing them. You’ll want to provide information that helps each of them to understand your value from their own unique perspective.

You define your target market(s) based on your knowledge of your current customers. If you’re just starting out, you may have to speculate on this information and then keep refining your market as you go along. If you’re seeking to expand your target markets, you’ll need to define what new group of people will have a need for your products/services and why.

Start by looking at the characteristics of different types of buyers and see if you can group them into “segments.” Consider all of the factors applicable to your buyers and users, which will vary based on your business. For example:

  • Demographics (personal characteristics such as geography, age group, sex, race)
  • Job title (if you’re selling B2B – business-to-business)
  • Particular industries (vertical markets)
  • How people use your products/services
  • Why people buy your products/services
  • The benefits or end results people value
  • Certain factors particular to your product/service offerings (for example; you may have a series of products for users without a technical background, and other products for technically advanced users)
  • Channel (the way people prefer to buy your products/services)

To illustrate, let’s say you provide coaching services for transitioning from a current occupation to a new occupation. Asking questions to define your target market(s) may look like this:

To whom have you provided these services in the past? What kinds of people or circumstances have synced best with the way you provide your services?
– “My customers have been located in my area because most of them like to meet in person.” Good, narrow it down further.

– “Well, I’ve been working a lot more with women than men.” Good, go further.

– “A lot of them have been in their current occupations for a while and want to try something new.” Why do they seek your services?

– “Some of them are bored; some feel too stressed; some have talents they want to use but currently don’t; some want to find more meaning in the work they do.” What else do you know about them?

– “Most of them have been 35- to 55-years-old, but some of them haven’t been out of college long.” Okay so there are probably two markets here: the older group and relatively recent college graduates. (Distinguishing these different demographics is important because later you will want to think about how to reach people who may need your services.) What else do you know?

– “The older age group usually has been somewhat affluent because they have been working, so they are able to afford to hire a coach. The younger group generally isn’t, so we might just meet a few times and I help them better understand the knowledge they’ve been developing and how they can apply it to a profession to start their journey.”

Now we have more of an idea of the primary target markets. You can see how you would continue clarifying your target markets as you understand more about:

  • Their demographics.
  • Their needs.
  • How and why they buy.

You may have other customers who fall outside of your primary target market(s), but if you know the primary markets you wish to address, your communications can be more targeted to help them to know you understand their needs very specifically. (Sometimes this is called, “Show me you know me.”)

You may find that it’s helpful to refine your product/service offerings themselves so that you have different options to appeal to different target markets. In the example above, we start thinking about having an offering for experienced professionals who want to switch occupations, and a different offering for new graduates who wish to get started on a professional track.

Some companies find it helpful to start out with a smaller, more well-defined market with a very particular need, often called a “niche.” (In the example we’re using, you might target women who have worked specifically in the healthcare area, and your communications would reference that.) Companies develop a reputation for great customer satisfaction in this niche and begin to get referrals. They then either choose new niches to add, or they find new niches developing based on the referrals with whom they succeed. Accordingly, they then may develop a specific set of products/services that appeals to the new niche, and so on.

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