Guide: Innovate Your Business Part Two

Who Is Your Customer?

Who is your customer? If the word, ‘everybody’ comes to mind when you answer this question, let us take a few steps back and dive deeper. ‘Why not target all consumers’,  you may ask. Well, having a clear target market will help you determine the right messaging for your consumer group, save you time and money, and accelerate the growth of your brand. 

Your customer is the most important stakeholder in your business. A deep understanding of your consumer base will help you best position your product or service in the market. As a startup or early-stage company, your product/service will probably satisfy a small segment of the market. As you grow, so will your understanding of the problem you are solving; and with this understanding, your customer profile might evolve.

The first step to identifying your customer is having an understanding of the value your product or service provides. What kind of consumers are seeking those product attributes you provide? Create a customer profile to help you narrow down your customer pool to those who are your target audience. Consider consumer variables to help define the ideal customers. Evaluate the different customer segments that emerge when taking a look at these variables. Find out everything possible about each segment.

Segmentation Variables for the Consumer Market:

Qualifying Variables = Demographic and Geographic

Demographic Variables:

  • Age
  • Gender
  • Race/Ethnicity
  • Income
  • Education/Occupation
  • Family Size/Family Life Cycle
  • Religion/Language
  • Social Class 

Geographic Variables:

  • Region
  • Market Density (Urban, Suburban, Rural)
  • City
  • County Size
  • State Size
  • Climate
  • Terrain

Determining Variables = Psychographic and Behavioristic

Psychographic Variables:

  • Personality Attributes
  • Motives/Values
  • Lifestyles (Activities, interests, Opinions)
  • Sexual Orientation

Behavioristic Variables:

  • Volume Usage
  • End Use/Reason for Purchase
  • Benefit Sought
  • Brand Loyalty Level
  • Price Sensitivity 

Create a Customer Archetype

The consumer archetype is a narrative of the profile you described as your ideal customer, focused on their behavior. Think of it as a way to organize your consumer’s personality type or “role” that they identify with. Creating a customer archetype can help you decide how to best tell your brand story and articulate your value proposition. Knowing specific pain points is useful for creating content, but to truly connect with your audience on a deeper level you need to understand their core professional and/or personal motivations. A customer archetype will force you to think about themes and motivations more than job titles and locations. Focus on what business or personal goals you’ve helped customers achieve in the past. 

Product/Market Fit

Product/market fit describes the stage of a startup company where they have successfully identified a target customer and serve them with the right product. After achieving product/market fit, the next step is to scale by finding more customers within the target market. But, how does one achieve product/market fit?

You can measure product/market fit using primary market research such as surveys that identify what percentage of your users think your new product or service is right for them.  But more often than not, product/market fit is less about hypothetical numbers and percentages, and more about an in-depth and tangible understanding of who your customers are, and how they feel about your company and your product or service. Are you creating organic growth within your target audiences where people spread the word on their own?

Price is a major determining factor when understanding your consumers. Are you targeting wealthy consumers or price conscious consumers? What price is most competitive in the market and the most ideal for your target market? Are people willing to pay for your product? If they are willing to pay, you have achieved product/market fit.

Resource Partners:

As you continue your customer discovery, seek resources that will help you better define and understand your market. As you are starting a business, advice from a mentor or business counselor will be valuable to help you avoid common mistakes. Organizations such as SCORE and the Small Business Development Centers can help you clarify your ideas and plans. 

 

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