HBMRGE DOUBLE DYNAMITE, Groucho Marx, Frank Sinatra, 1951

By: Darren Baines / September 15, 2022
Tags: Customer satisfaction, Marketing Strategy

Defining your customer

When a product or service has mass-market appeal, a business may consider its customer to be anyone and everyone. Whilst a business may want everyone to like or use their product or service, the truth is in fact the opposite. Every business, product, or service has its own target customers and markets.

This is true, whether you are an international beverage company such as Coca-Cola, or a local microbrewery. No matter who broad the consumption of your product or service, everything has an ideal customer or client. Once a business begins to hone in on what its target customer (or even market) looks like, the ability to grow and achieve success increases.

5 reasons why “everyone” is not your customer

Whilst many brands operate within niche markets, the lure of mass-market appeal can lead businesses astray. And, even if your brand does serve a large proportion of the population, there are still dangers in believing that everyone is your customer. Here are five reasons why you should segment your customer base and focus on your ideal target audience.

  1. Not every customer is profitable

Whilst you can serve anyone and everyone you like; the chances are the ‘cost to serve’ each customer or client can vary wildly. This could be down to a number of factors such as geography, customer support levels, or price sensitivity.

When you know the cost to serve, you can identify which customer groups are most profitable.

  1. Focus your resources

Another key reason for defining your ideal target customer groups is to help you focus your resources. Unless you have infinite budgets or employees, the chances are you will be restricted to whom you can target.

With defined target customer groups and an indication of their profitability, you can begin to target your resources to those that will bring the most value to your business. This is particularly important in marketing because you want to be sure you’re allocating your marketing budget to the tactical elements that are effective.

  1. Enhance your marketing efforts

When selecting a specific target customer or a group and dedicating marketing budgets to focus on just them, their exposure to your brand, product or service multiplies. This is important, because we need frequency to convert audiences to customers.

The Rule of Seven states that a prospect needs to “hear” the advertiser’s message at least seven times before they will take action to buy that product or service.

So, if you are using a scattergun approach, you reduce your opportunities to be seen or heard, therefore it takes longer to generate sales.

Whereas with focussing on a target customer group, your marketing efforts are completely centred around them, giving them greater exposure to your message.

  1. Speak your customers’ language

When you try to serve everyone, you serve no one. This is particularly true with marketing.

Communications that are broad, become vague and unpersuasive. On the flip side, when your marketing is directed at a target customer it becomes very specific.

You can put their needs, wants and pain points under a microscope and deliver value propositions that speak to them directly.

  1. Be an expert in your field

Through speaking your customers’ language and tapping into their values, beliefs, and emotions, whilst resolving their needs, wants and pain points, you become an expert.

As you focus solely on your niche, and what they want and desire, your knowledge and connection with this customer group grows. Your research, education, product development, and service delivery become hyper-focused on delivering value to your ideal customer.

When you are considered the expert, then your ability to offer premium solutions increases, and so does your profitability.

Methods of defining your customer groups

There are many ways to segment your customer groups down into different personas. Some of the most common ‘marketing’ elements include:

Demographics: Age, Race, Ethnicity, Gender, Marital Status, Income, Education and Employment

Behavioural: Purchase Behaviour, Benefits Sought, Usage, Occasion or Timing and Loyalty

Psychographics: Personality, Attitudes, Interests, Values and other Lifestyle Factors.

However, there may be other considerations or methods you can use to segment your customers, or at least help you define what the ideal customer looks like.

Pareto’s 80:20 theory helps explain the phenomenon that typically 80% of profits come from 20% of customers. When you know who that 20% is, you can begin to outline their characteristics to help you find more of those customers.

But if that market is already saturated and you’re seeking to grow your sales without diversification of products or services, you could consider the adoption cycle. This identifies that products and services typically go through five adoption stages: Innovators, Early Adopters, Early Majority, Late Majority and Laggards.

If you can pinpoint where your product or service is in that adoption cycle, you could look at what that next segment may look like. A few good examples of this include:

  • Social media channels – they typically are adopted by younger teenagers, and then slowly become embraced by older peers and then parents.
  • Technology – there are people who want the latest console or equipment immediately, whilst others will wait until the rush has passed. Whereas a larger group will wait to see if it works and provides value, seeking social proof before they buy. Eventually, this technology seeps into every corner of the population. This can be seen with the smartphone.

Whichever method you use, when you have defined the audience and their characteristics, your chances for success improve through more effective, personalised marketing efforts.

Darren Baines

Marketing Specialist & Director

Darren is an experienced marketer, having worked both client and agency side to deliver digital and traditional campaigns.

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