You may have tailored your product to a particular customer type, like high-end buyers or tech-savvy college graduates. You can know that much, but unless you spend the time and energy to research your target customer, there’s a very good chance you’re making assumptions when you should be running a fact-based marketing strategy. The difference adds up to real dollars.
As it turns out, the largest, most successful companies all started with a small list of defined target customers before expanding into new markets. Amazon started out targeting book buyers who were comfortable shopping online. Facebook targeted Harvard students before expanding to other universities and audiences. As their businesses grew, the profile of their target customer changed. If they had remained focused on exactly the same target customer, their growth would have been significantly impeded.
The strategy around your target customers is an iterative process of adjustment and refinement over the life of your business. In fact, the target customer that you’ve focused so heavily on for the first few years of business may be entirely different than the target that you focus on now.
1. Define your ideal customer
The easiest way to narrow down your focus is to define your target customers by researching their demographic and psychographic traits.
Demographics explain who your buyer is. More subtly, psychographics explain why they buy.
Demographic information includes age, gender, ethnicity, income, geographic location, etc. This type of information can be found through a variety of sources like the American Fact Finder that is offered through the Census Bureau. Once you know exactly what your target audience looks like, you can track every single interaction with a Customer Relationship Management software platform, like Infusionsoft, to be sure that your sales and marketing efforts line up with your target customer.
A powerful complement to demographics is psychographic information. It provides more in-depth profiling about how your customer’s attitudes and behaviors translate into purchase decisions. Psychographic information will include things such as the type of music they like, which brands they buy, attitudes, beliefs, lifestyle choices, etc.
The fastest way to understand psychographic data is to ask your existing customers and prospects. In-depth surveys work well. Also, focus groups, social media, and sources like Nielsen's My Best Segments can complement your efforts. You can also determine your CRM and marketing automation software to see how certain demographics behave in relation to how they consume your content and buy from you.
In addition, if you sell business-to-business (B2B), you’ll need to define the type of business that you’re targeting; things like, industry size, number of employees, revenues, buyer type, and more. B2B is less likely to surprise you as you refine your target market, but even industry customers evolve as they take on new technology, adapt to market conditions, and meet the needs of their own evolving customer base.
2. Create a positioning statement
A positioning statement concisely describes your target customer and how you want your brand to be perceived in the market. A positioning statement includes information about target customers, product or service benefits, and key differentiators. It’s generally shared internally so that employees who are responsible for marketing and communications can build messaging around it. Every product and marketing decision you make regarding your brand must align with and support your positioning statement.
To create your positioning statement, analyze your research and begin by developing a clear problem and benefit statements. Then, identify one to three customer personas that will help you personify your ideal customer. Each persona should capture the demographic and psychographic data you’ve collected around your customer base.
Once you’ve developed your positioning statement and have a clear sense of who your target customer is, you can craft your messaging and speak directly to customers who are more likely to buy.
3. Learn to say no
Marketing to the right people means not marketing to others. Of course, you don’t want to turn away a customer who wants to buy from you unless you have a legitimate business reason to do so. But there’s a benefit to marketing to the right people in deference to all others.
When you say no to misaligned opportunities, your marketing message will get crisper as you hone in on your ideal customer. At its core, business is about finding a market opportunity, understanding the needs of that market, building products and services to meet those needs and convincing people in that market segment that you are the right solution.