Let’s be honest advertising and marketing can be really expensive if you get it wrong, and getting it wrong is really very common.  You see most business owners when asked who they want to sell to will say something like, anyone, anyone with a pulse and a wallet. Providing they’ve got the money I want to sell to them. The problem with this approach is that not everyone is right for you, your products or your services.

This is why one of the most important elements of your marketing strategy should be the development of an ideal target customer profile, or as it is sometimes referred to “an Avatar”. This allows you the business owner to effectively understand who makes an ideal customer and allows you to build your entire business, message, product, services, sales and support around attracting and serving this narrowly defined customer group. This makes targeting your advertising spent a lot more efficient as you’re now not wasting money on those that are not really interested in you or your products.

So how do you identify your ideal client.

When working with businesses that have an established customer base I can generally identify their ideal customer by finding the common characteristics found in their most profitable clients. However, I want to address the needs of the startup or businesses with very little customer experience. Finding and serving an ideal customer is equally important for a business just getting started and establishing a focus on discovering a narrowly defined ideal client from the very beginning will save months of wandering in the dark trying to be all things to all people.

The 5 steps below can put you the path to discovering your ideal target customer.

1) Start Small – This may feel counterintuitive to many just starting a business, but you have to find a group of customers that think what you have to offer is special. When you’re just getting started you may have very little to offer and in many cases very few resources with which to make sufficient noise in a market for generic solutions. The key is to find a very narrow group, with very specific demographics or a very specific problem or need that you can solve or meet in a unique way with the aim of creating raving fans. You can always expand your reach after you gain traction, but you can also become a big player in this smaller market as you grow.

2) Create an Initial Value proposition– above I mentioned the idea of finding a niche that finds what you have to offer special and unique. Of course, this implies that you do indeed have something to offer that is special.

You must create a ‘why us’ value proposition and use that as your hypothesis for ‘why us’. If this is starting to sound a little like a process then that’s because it is. The art of success is based around test and measure. So many business owners get caught up in trying to execute their business plan when the fact of the matter is, the market doesn’t care about your business plan. The only thing that the market cares about is what you do for them, how you solve their problem.

3) Test your hypothesis  – Existing businesses have the ability to learn a great deal every day from customer interaction. Since startup’s don’t have much customer interaction they have to create ways to test their theories. The key to both making and affirming your initial assumptions about your initial value proposition is to set-up test sessions with prospects that might easily fit into your initial smallest market group. These are essentially one on one meetings. This can be a little tricky since you have no relationship with the prospect. There are industry and trade groups that could contain your initial target market and by joining these you may have an easier time gaining access to this group.  Another possible option is to offer free sample products or beta test relationships to those willing to provide you with agreed upon feedback.

The main thing is that you start talking to prospects about what they need, what they think, what works, what doesn’t work and what they don’t have now. This is how you evolve your value proposition, your features and your assumptions based on serving a narrowly defined target.

4) Create your ideal customer profile (Avatar) – Once you’ve trotted out your hypothetical value proposition and tested it with your narrow group, you’ve got to go to work on discovering and defining everything you can about your ideal target group. Some of this information will be commonly understood, such as demographics, but much of it will be discovered in your test sessions and though some additional research using resources such as social media or google. I have a really useful tool for profiling your ideal customer (Click Here to Download a copy). This walks you through the process of identifying your ideal client, creating your USP and your marketing message.  It can be used by existing businesses as well as startups.

5) Add Strategy Model Components – the final step is to apply this new ideal customer approach to other elements of your strategy. The thing is, when you discover your initial ideal client it should impact the thinking about your basic business model and overall business strategy. All great business models are customer focused and now that you have a picture of this customer it’s time to consider how this alters the other aspects of your business.

  • Think about how this discovery might impact your offerings, your revenue streams, distribution channels and even pricing.
  • Think about how you can reach this market, who you can partner with and what resources you either have or need to have in order to make an impact in this market.

I can tell you that from working with hundreds of business owners you’re never really done with this exercise. As your business evolves, as you learn and grow, this model will evolve as well, but perhaps the continual process of discovery is just as important as what you discover.