Many entrepreneurs reduce their chances of success right from the start of their business because they fail to identify who their ideal customers are. They ONLY focus on “what” they’re selling, rather than “who” they’re selling to.
The first important step to take when it comes to marketing your product or service is determining the exact set of people who need your product or service. If you don’t know who your ideal customers are, it will be difficult to position your offer as the solution they need.
It’s important to define who your ideal customer is because not everyone will qualify as your target audience. You’re going to do a great disservice to your business if you keep attempting to serve everyone, instead of focusing on the people who actually need your product or service.
In this post, you will learn the exact steps to identify who your ideal customer is and how you can use your customer avatar to generate more qualified leads and sales.
Who Is An Ideal Customer?
An ideal customer is someone whose needs perfectly align with the solution you’re providing and can afford to pay for your product or service. These are the people you want to target with your ads and content, comfortably increasing your revenue over time. Your ideal customer needs and wants your product or service, and are ready to pay for it.
How Do You Identify Your Ideal Customers?
1. Know Your Product or Service
As simplistic as this may sound, it’s the first most important step to take when you’re defining your ideal customer. This is beyond talking about features. You must be able to demonstrate the intrinsic value in your product or service.
What solution or value does your offering provide? How does it improve your customer’s life or career? What’s in your product or service that will make them choose you over your competitors? What is your Unique Selling Proposition? Answering these questions will help you figure out the right people your product or service is meant to serve.
2. Analyze Your Current Customers
You can pull out some useful data by analyzing your existing customers such as the problem they were facing, their expectations, and any feedback they can share towards your product or service. Ask them specific questions around the value they are receiving by using your product or service. The information gathered can help you pinpoint who else is most likely to buy from you.
When analyzing, you can stick to the top 20 percent of customers who probably contribute to 80 percent of your sales. You will notice some trends or common attributes among your best customers. Once you have that, you can use the data to create your ideal customer.
In addition, you can use tools like Google Analytics to learn about your ideal customers. Google Analytics provides you with a large pool of data about customer’s buying behaviors, preferences, browsing and conversion history. For example, you can find out how some of your current customers found your site, including their basic demographic information such as their country, city or language, and more importantly, how they browsed your site once they got there.
3. Your Target Audience’s Buying History
For every ideal customer you have in mind, you want to be sure that they are someone who will be interested in the solution you’re offering and are ready to pay for the value you’re delivering. To do this, you can make use of marketing analysis tools such as PVP (Personal fulfilment, Value to the marketplace and Profitability) or RFM (Recency, Frequency and Monetary Value).
RFM helps you answer the following questions:
- When last did your ideal customer make a purchase?
- How frequent do they buy?
- How much purchasing power do they have?
For example, recency is based on the belief that the more recently a customer has made a purchase from a company, the more likely they will continue to keep the company or business in mind for subsequent purchases. You want to consider someone who buys recently, frequently and with enough money to spend as your ideal customer.
4. Talk To People
If you’re just launching a new product or pivoting to a new business model, you’re less likely going to have a track record of sales from which you can mine data from. Talking to people helps you gather fresh insights and data that can enable you to make a more informed decision about who your ideal customer is. Ask relevant questions on online niche-specific groups or social communities, learn about their pains points, goals and objectives. Then find out the kind of solution they’re looking for, and offer your product or service if it can solve their problem
One of the benefits of talking to people is it enables you to learn the language of your target audience and replicate the same in your marketing communication to create a message that resonates with your potential customers.
5. Create An Ideal Customer Profile
The next step you want to take is to create an ideal customer profile, also known as a customer avatar. Your customer avatar is a sort of fictitious character that represents the ideal customer that your product or service is designed for.
The avatar doesn’t make assumptions or categorize people into groups. Instead, it focuses on one person and outlines every important characteristic about them. It can be a completely fictitious representation or built up from your existing customer-base through customer interviews.
Here’s some of the information an ideal customer avatar contains.
Demographic information
Demographic information includes the age, gender, race, income level, occupation and job title of your ideal customers. For example, if you’re a marketer who specializes in the sales of luxury vehicles, your ideal customer profile will likely exclude college students and focus on people who are probably in their 30s and 50s with high expendable income and preference for luxury cars.
Geographic Information
Geographic information includes the location of your ideal customer. Is your business location-based? If so, you’ll need to find out the country, state, city or town where your prospects live.
Psychographic Information
Psychographic details include the attitude, interest, beliefs, organizational affiliations, prejudices, likes and dislikes of your ideal customer.
This may also need to include their “miracles” and “miseries.” When doing a search about their miracles, you’re considering their wants, needs, desires, goals and fantasies. Miseries on the other hand include their pains, frustrations, worries, concerns, fears, and anything that keeps them up at night.
Knowing your ideal customer is crucial to creating a strong marketing message that generates qualified leads and helps you close new sales opportunities for your business.
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