One of the most important elements of a marketing strategy is the development of an ideal target customer profile. Effectively understand who makes an ideal customer allows you to build your entire business, message, product, services, sales and support around attracting and serving this narrowly defined customer group.

Image See-ming Lee SML via Flickr CC

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 that also refer them to others. I’ve written about this kind of ideal client discovery here.

Today, however, I want to address the needs of the start-up or business 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 with the Smallest Market Possible – 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.

Your key is to find a very narrow group, with very specific demographics or a very specific problem or need and create raving fans out of this group. 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 Hypothesis – In the step above I mentioned the idea of finding a narrow group that finds what you have to offer special. 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 you hypothesis for why us. If this is starting to sound a little like science that’s because it is. You must always stay in test and refine mode in order to move forward.

Many people 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 matters is what you discover and apply out there in the lab beyond your office.

3) Get reality in Discovery Test Sessions – Established, thriving businesses have the ability to learn a great deal every day from customer interaction. Since start-ups don’t have any customer interaction they have to create ways to test their theories initially and on the fly.

The key to both making and affirming your initial assumptions is to set-up what I call Discovery Test Sessions with prospects that might easily fit into your initial smallest market group. These are essentially staged one on one meetings.

This can be a little tricky since you have no relationship with said prospect. I often find that there are industry or trade groups that may 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 and what don’t have now. This is how you evolve your business, your features and your assumptions based on serving a narrowly defined target.

4) Draw an Ideal Customer Sketch – Once you’ve trotted out your hypothesis 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 in more behavioral oriented places such as social media.

This is a great time to start your CRM thinking by building custom profiles that include much richer information than most people capture. I wrote about the new breed of CRM that is making this easier to do than ever.

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.

Consider now how this discovery might impact your offerings, your revenue streams, distribution channels and even pricing.

Consider 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 my experience suggests that 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.

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John Jantsch

John Jantsch is a marketing consultant, speaker and author of Duct Tape Marketing, Duct Tape Selling, The Commitment Engine and The Referral Engine and the founder of the Duct Tape Marketing Consultant Network.
  • Philip Quintas

    I feel a very personal connection with this post.  It specifically addresses my current situation.  I am working to break into a different market, but don’t know how to successfully attract ideal clients.  My desire is to build a sustainable, highly profitable business using your method of marketing.  Thank you, John, I really appreciate your help.

  • Jay Oza

    Excellent tips!

  • John these are timeless points you make here, yet so often overlooked or forgotten.

  • thanks for sharing John 

  • John-Your blog is on the money. We are an early stage tech firm and breaking into new markets. Our initial target market turned-out to be too narrow and so we are now pursuing new markets. Some basic paid search and SEO expanded our markets from 1 primary market to over 10. Now we are asking ourselves which markets are the most lucrative that can also be entered with the greatest speed. Start-ups and early stage firms do not have the luxury of large firms and as a recovering Fortune 500 employee I am finding that out!

    Dave Gee
    CEO & Co-Founder
    Bungee Loyalty Programs

  • The best part is the strategic approach that can be applied with effort, as in all good practices, to have your ideal client at top of mind in all the things your business does and touches of the customer’s experience.

  • G’Day John,
     I’m dedicated to the idea of a narrow, specific target market. I know exactly who mine is. My problem is finding themRegardsLeon

  • clarestweets

    What  I most like aout these steps is that they are so actionable. I especailly like the idea of creating a customer sketch as a starting point, then I would suggest reviewing an revising that sketch at key points in the company’s evolution such as first release customers, initial fans, referral groups and so on. Great new ideas on finding those first critical customers.

  • Great advice John!
    The start-up can have a more difficult time with this, but this is a perfect road map.

  • The further you can manifest, then find, then chat to your customers the better you’ll do. Just chatting to get to know. You posts always great advice john. 

  • Mia Aiello

    Great advice, thanks for sharing John! I also read a great article on how better segmentation, can create a more meaningful strategy.