So you have an awesome idea. You have told your wife, kids, pets and in fact, anyone prepared to listen to it and really think you have the next billion-dollar business idea – but do you really!?
If you have not taken a chunk of focused time to properly define who your ideal customer is then the answer is maybe!
In today’s society, it is no longer enough to be the best or cheapest at what you do – you need to CONNECT while SOLVING A PROBLEM. In a society where people will have 1000’s of Facebook ‘friends’ yet invite less than 100 people to their wedding you don’t want your business to be the metaphorical ‘non-invited’. Your entire business, message, product, services, sales, and support should be geared towards building connections that enrich, empower and ultimately solve a problem otherwise you run the real risk of having loads of ‘likes’ and ‘yes we love your idea’ but no money and consequently no business (unless maybe if you are NGO).
You can’t easily achieve this unless you are clear about who your ideal customer is. In fact, I think people forget that you actually get to choose your customers. You get to choose who you want to do business with. And if you don’t choose who you want to do business with, your customers will choose you… and they may very well be less-than-ideal.
FOMO – Fear Of Missing Out
So you might be reading this and thinking that surely it is better to get as many customers as humanly possible from as broad a base as possible but it’s not- you think that if you focus on only one type of customer, you’ll miss out on all the rest.
But the reality is when you don’t focus, and instead, try to be everything to everyone, you end up making a connection with no one. When that happens, I guarantee you’re missing out.
You’re missing out on every one of those people who are, in fact, your ideal customer.
So do yourself a favor and fight FOMO…
A point to stress is that determining your Ideal Customer is NOT about determining the ONLY type of customer you’ll ever do business with, ever.
No, it’s about determining the Ideal Customer for a particular situation and being clear that that situation is mutually beneficial to both of you over as extended a timeframe as possible.
So why is it important to define your ideal customer?
There is a whole host of reasons why it is absolutely vital so here are our choice selections (gained from some hard-earned ‘school fees’).
Efficiently focus the use of resources: When you don’t know who your ideal customer is, you end up trying to chase every opportunity and become everything to everybody (or nothing to nobody), which is a sure recipe for failure (Point 7 in a blog post I wrote recently). Identifying your ideal client narrows the scope of ALL your efforts and enables you to use your resources much more effectively.
Better quality leads: Look… when you don’t know who your ideal customer is, you can’t talk to them using their language. It means you are not going to be able to better cater your marketing to the right people in the right places, all which means you miss the powerful opportunity to generate better quality leads. Simply put…People don’t buy from you because they understand what you do… they buy from you because you understand what they do and can communicate it in a way that is easy to understand.
Better Product Development: Not only does knowing your ideal customer allow you to generate better quality leads, but over time, this knowledge can also help you work with your customers and build future products/product features to suit their needs. You’ll be more likely to keep customers for the long haul if your products and services grow and change with your customers.
The long and short of knowing who your ideal customer is is that it will save you tonnes of money, tears, frustration and time (for both you and your customers) and will lead to you building a group of absolute fanatics in what you do and how you do it!!
How do find out who the ideal customer is for my idea?
So you have read this far so am sure you are itching to know how you can tell an ‘ideal customer’. Some typical questions you might ask are:
- Who should buy from us, and why?
- Do they have the financial resources to buy from us?
- Of this group, which clients will be the easiest to find and sell to?
- Which clients are we most likely to develop ongoing relationships with?
- Which clients will deliver the most revenue over the life of our relationship with them?
- …and the list goes on (feel free to comment on this article with your preferred list of questions)
We typically perform three checks that form the basis of whether a customer is suited to our business or not and here they are:
1. Is the Customer ‘Ready’?
- Do they have a problem they need to have solved (or opportunity)?
- Do they know they have the problem (or opportunity)?
- The problem or opportunity is acutely felt … there’s a sense of urgency you can take advantage of
2. Is the Customer ‘Willing’?
- They’re ready to solve that problem by taking action (or even better already tried to take action but the action is not their ideal solution)
- Even better if they’re exploring options to solve that problem
3. Is the Customer ‘Able’?
- Do they have the means to solve the problem (i.e. they have the money)?
- Do they have the authority to solve the problem
Ready, Willing, and Able are the baseline characteristics of an Ideal Customer. If you are not able to concretely answer ‘Yes’ to ALL THREE characteristics you will find it incredibly difficult to attract customers that actually make you money!
Start with the smallest market possible
This is a final thought and 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 (slightly broader than just your friends and family though), 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, learn a couple of lessons about what works/doesn’t work about your idea and over time you can even become a big player in this smaller market as you grow.
Do you have a good idea or a business?
The above is not an exhaustive framework (it’s just things we have learnt the hard way) and I will post more on this topic in future but if you do nothing else ensure you are crystal clear that the customers you want to target are ‘Ready’, ‘Willing’ and ‘Able’! That is very often the differentiator between you having a ‘cool idea’ and a business (or potential business).
And if all the above seems too much to wrap your head around then contact us at MTYsquared and we will gladly meet you for a free consultation to evaluate whether you are ‘business ready’ with your idea.
That’s it from me… #ToThePowerOf MTYsquared!