By Tracie Rollins
What you think you know about your target customer is wrong. Your customers don’t share your mindset and don’t have the same values or beliefs that you do; they don’t even make purchases for the same reasons. While you may have the same type of dog or share an affinity for sustainability, you can’t let your similarities fool you into thinking that they’re just like you. If you want your small business to succeed, you need to know who to market to: your target customer.
Narrow down your target customer
Having intimate knowledge of who you’re trying to attract is key -- without it, you’ll spend thousands of dollars on marketing campaigns that yield little to no return. Trying to reach everyone with your product or service is not only inefficient and expensive, but it drains your resources and energy, ultimately leaving you frustrated and disappointed. The easiest and most cost-effective way to improve your marketing campaign results is to narrow down your target customer.
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. LEGO targeted children ages 3—12 back in the 1950’s before expanding their product lines to toddlers and teens.
Thinking strategically about your target customers is an iterative process that you adjust and refine 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. The danger in not knowing who they are means you’re not marketing to them in a way that makes you their first choice. To narrow down your focus, you’ll need to define your ideal customer, craft a positioning statement and learn how to say no.
1- Define your ideal customer
The easiest way to narrow down your focus is to define your target customers by researching their demographics and psychographic traits. Demographics explain who your buyer is, while psychographics explain why they buy. Demographics Demographic information often includes age, gender, ethnicity, income, geographic location, as well as other types of information about who they are, where they live, and what they do. This type of information can be found through a variety of sources like the American Fact Finder that is offered through the Census Bureau.
You can also find this demographic information through your Customer Relationship Management (CRM) software, social media platforms and by benchmarking your competitors. As you define your ideal customer, remember to be intentional about saying yes to certain attributes and being clear about attributes that you’re saying no to. Consider the list below and write down the attribute of your ideal customer:
- Family/marital status
- Ethnic background
Psychographics Customer psychographic information provides more in-depth profiling about how your customer’s attitudes and behaviors translate into purchase decisions. Psychographic information will include things like what type of music they like, which brands they buy, how often they go shopping and how much money they spend on certain purchases. It may also include the psychological and cultural reasons behind why people make certain purchasing decisions.
The fastest way to find psychographic data is to ask your existing customer base. Surveys are great, but nothing is better than stealing a moment or two with a few of your key customers to talk about why they do business with you. Other sources of psychographic information include focus groups, social media, Nielsen's My Best Segments, and data mining your CRM and marketing automation software. Once you’ve gathered your data sources, use the list below to define their psychographic characteristics.
If you sell business to business (B2B), you’ll need to define the type of business that you’re targeting. B2B factors include:
- Industry size
- Number of employees
- Buyer types (economic buyer, technical buyer or end-user)
Once you understand whom you’re targeting, you can begin to strategize how you’d like them to perceive your brand and craft a positioning statement to help you gain clarity, focus and direction.
2- Create a Positioning Statement
A positioning statement concisely describes your target market and how you want your brand to be perceived by that market. 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. A positioning statement includes information about target customers, product or service benefits and key differentiators.
To get started with creating your positioning statement, survey and interview customers and develop clear problem and benefit statements. Then draft and test your positioning statement and refine it as you go. Use the following template to begin to craft your positioning statement: For (target customers), (company) is the leading (category) that provides (unique benefit). Unlike competitors, (company) does (unique differentiator). Here’s an example:
Infusionsoft is the leading sales and marketing software for true small businesses, designed to help them get organized, grow sales and save time.
Unlike other small business software providers, Infusionsoft is solely focused on small business success and provides one system for sales and marketing.
Once you’ve developed your positioning statement and have a clear sense of who your target customer is, you can begin to craft your messaging and speak directly to customers who are more likely to buy. You can stop focusing on everyone else by learning how to say no.
3- Learning to Say No
Saying no to new opportunities is hard especially when every penny counts. However, saying yes to the wrong opportunity causes confusion, customer dissatisfaction and misalignment. It can also take your business to places you don’t want it to go. Obviously, saying no to customers based on race, color, religion or natural origin is a violation of civil rights and you don’t want to turn away a customer who wants to buy a product or service unless you have a legitimate business reason to do so.
Businesses almost always suffer when they try to be everything to everyone, so learn to say no to opportunities that don’t align with your positioning statement. When you say no to misaligned opportunities your marketing message gets crisper, which makes it easier to find its way to your ideal customer. You’ll also find that it’s easier to acquire new customers, wow them and gain referrals and repeat purchases. At its core, business success is about finding a market opportunity, understanding the needs of that market, building products and services to meet those needs, and convincing those people to use your products or services time and time again. Your dream of achieving profitability and solid economic growth can be achieved, but understanding your target is the key.