Today I want to talk to you about defining your customer segments so that you can improve your marketing.
One of the things I talk about A TON with all of my clients is being very clear on who your ideal customer is so that you can target your marketing only to that ideal customer. This not only improves the power of your marketing messages so that you’re more likely to convert potential customers but also allows you to be more deliberate about where and how you market so that you can spend less money overall by not wasting time, energy, and cash on marketing to people who are not your ideal customer anyway. If you’re not sure what an ideal customer is, check out my post on precisely that.
What generally happens when I start having these conversations with clients, however, is that they’re not able to narrow down to just one ideal customer group. Now, it’s perfectly acceptable to have more than one target customer group. It is not okay to be lazy and just say you have a bunch of ideal customer groups because you don’t want to figure out who your ideal customer really is. Remember, this isn’t who will buy from you, this is who is the best customer you can hope to get – they’re interested in what you offer, they get a lot of value from it, they’re easy to deal with, they’re repeat customers, they spread the word about you, they’re not always asking for a discount, etc.
So, let’s say you feel like you have 6 groups of people that might be your ideal customer. You need to prioritize so that you can make the best use of your limited marketing resources so you have to rank those different customer segments and Customer Development Labs has come up with a quick and dirty tool for doing just that.
You definitely want to click the link to see their full post, but here is the basic overview:
Make an Excel spreadsheet where list each of your potential customer segments as a column heading and list market size, pay for value, and accessibility as row headings. Now, give each potential customer segment a ranking from 1 to 3, with one being the lowest and 3 being the highest, for each of the categories. Market size is how many people out there fall into this customer segment or category. Pay for value is how much someone in that category will pay for the value you’re offering them. Accessibility is how easy it will be for you to get in front of them. Then you multiply the 3 scores for each category together to get a total score and use that total score to rank the priority for each customer segment.
This will pretty quickly give you an idea of where you probably want to focus your marketing resources. Now, this doesn’t mean this will turn out to be right. You might start going after whichever customer segment got the highest score and then find out they’re really not as desirable as you thought, and that’s fine. The tool isn’t designed to give you the gospel truth about who your ideal customer is; the goal is to quickly move you from hypothetical to actual testing while still keeping you focused on your likely best customers.
If you’re an aspiring entrepreneur, the best thing you can do for yourself is to just get started. Pick up my business planning ebook here to be guided through the whole business planning process for less than $5. More of a video person than a text person? Click here to try my ecourses instead.