Five Steps For Defining Your Ideal Customer

With a customer driven approach to business development, your goal is to know your customer better than anyone else.  Customer intimacy is critical to finding product-market fit, the first major milestone in the development of your business.  Finding product market fit may take one to two years longer than you think.

In previous articles, we looked at market segmentation and beachhead market. We also looked at how to conduct primary market research to validate your beachhead market and to begin the process of developing customer intimacy. After conducting 50-100 interviews, you should find growing evidence that you are focused on the right beachhead.  People you talk with should express a strong pain and sense of urgency to solve a problem that your business idea is aligned with. If not, you need to re-examine your beachhead market selection.

Once you have confidence that you have selected the right beachhead market, you want to focus on getting to know your customer even better.  In looking ahead, we will begin to conduct a series of activities to take a deeper dive into customer intimacy. In order to do that, we must take some time to further define the End User and Persona for our beachhead market.

Identification of End User characteristics and a Persona will help align your staff internally as to who the customer is and ensure everyone is focused on the same target market. Your End User Profile will help focus product development efforts, go-to-marketing strategy, and selection of your business model, and pricing framework.

1. Develop An End User Profile

Your End User Profile should contain demographic, psychographic, and geographic information about your target customers. Demographic information will include things like age, sex, education level, income, marital status, occupation, religion, and family size.  Psychographic information will include things like activities, interests, opinions, attitudes, values, motivations, and behaviors of your target customers. Geographic information will include things like place of work and their residency. Are they rural, city, or urban? It’s ideal if a founder, or at least an employee, fits into your beachhead market End User Profile.

2. Identify A Persona

Your Persona is a real persona that fits within your End User Profile. Choose your Persona (preferably a customer) and develop a description of them, including their photo, backstory, job, salary, purchasing criteria (in order), and as many defining details as you can gather. The great part about having a real person is that you can always go ask them if you are trying to resolve an issue about the product, marketing approach and pricing to get their response.

3. Involve Your Team

Get the whole team involved in this process. The goal is to help you settle questions in the future about who the customer is, what they want in a product, how to sell to them, and how they make purchasing decisions. Similar to the End User Profile, the Persona helps align your staff internally on who the customer is. But your Persona is also a real person you can talk with to gain immediate feedback when making decisions.

4. Create An Anti-Persona

Is there such a thing as an anti-persona?  Are there customers that you don’t want?  Many business owners can tell you that a small handful of customers create most of their problems.  Some customers have expectations that can’t be met or maybe the product is not the exact fit for their pain points.  Whatever the reason, there may be certain types of customers that you would be better off without.  Can you write a description about them?  Can you identify such a person? Then teach your staff to avoid this type of customer.  Better yet, send them to the Sales Manager of your competition.  Your competition will love you for it…..until they become a problem.

5. Identify The Next 10 Customers

Can you identify the next 10 customers out of your beachhead market that fit within your End User Profile?  Similar to the TAM (total addressable market) providing a sanity check for picking a market the right size, identifying the next 10 customers that fit your End User profile is another sanity check that you are heading in the right direction for your target market.  If you can’t find 10, then you may need to adjust your beachhead market or your End User Profile.

…Your End User profile is another sanity check that you are heading in the right direction for your target market.

A few things to consider:

• Development of an End User Profile is not about achieving 100% accuracy but more about testing and refining your hypotheses. It’s about continuous learning and developing customer intimacy.
• Moving forward without clearly understanding your customer is a recipe for failure and the number one reason many business fail to achieve product-market fit.
• Distribute the End User Profile to everyone within the organization to ensure the whole organization is aligned on who the customer is.
• Defining your End User, selecting a Persona, and identifying your next 10 customers provide a sanity check and great confidence for moving forward.