How do you find prospects who are interested in what you're selling? As a business owner, you already know not everyone is interested in your product or service. On the other hand, there are those who like your product and might show signs of interest by subscribing to your social media channels or visiting your company's website, all without much marketing effort. But to achieve real growth, companies need to increase brand awareness and attract new leads who haven't yet discovered your offering. To do this effectively, you need to learn how to identify your target market and ideal customer profile. Doing this allows you to narrow the marketplace and find a niche were you can most easily reach potential customers with a message they want to hear.
Knowing your ideal customer profile will enable you to customize a strategic marketing approach instead of wasting time, money, and effort on the wrong segment of the market. In addition to identifying your target market, you also need to specifically identify your ideal customer profile. An ideal customer is someone who is part of your target market. They are likely to be a potential buyer of your product or service because it solves a specific problem or fulfills a need or want.
Keep in mind that your ideal customer profile depends on your brand identity and the product or service you are selling. Finding potential buyers takes time and dedication. If the product is right for their needs and you've demonstrated its value, you're well on your way to acquiring a new customer.
In part 2 of our Masterclass Series on "Building a Strategic Marketing Plan for Your Business," The Five Echelon Group's Founder/CMO Eric Dickmann talks with content marketer and Rialto Marketing President- Tim Fitzpatrick about identifying your target market and ideal customer profile.
Tim Fitzpatrick is a content marketer and the President of Rialto Marketing. He is an entrepreneur with over twenty years of experience in marketing, business development, sales management, and strategic planning. Fitzpatrick got involved in mobile marketing at the late-2012 because he saw a great opportunity to help organizations improve by taking advantage of the use of portable devices in the business. After his graduation, he was fortunate to get involved with whole distribution company, which he co-owned for nine years. Currently, Tim Fitzpatrick and his team at Rialto Marketing is focused on helping service businesses simplify marketing so they can grow with less stress. Tim loves mountain biking, skiing, and playing golf with his family.
Subscribe to the The Virtual CMO podcast
Why Defining Your Target Market is Important
In their own consulting practices, both Eric Dickmann and Tim Fitzpatrick have worked with many clients and have seen common problems emerge with businesses as they attempt to market their products and services. While every business is unique and has its own challenges, these two major problems were the most commonly seen:
- Businesses tend to cast a wide net and fail to focus on a specific, identifiable niche. They spend too much money on going after a broad market and end up wasting time and money while achieving a less than desirable results.
- Business tend to apply marketing efforts inconsistently; turning on and off the marketing faucet based on business conditions. If you want good results, you have to ensure that you are consistent in the execution of your marketing strategy. If you are inconsistent with your marketing investment, you can easily fall off the radar of potential buyers.
Above all else, you need a plan. A strategic marketing plan. One with clearly defined goals and objectives that you'll be able to track and measure against. A basic understanding of your market, customer, and the tactics needed to reach them with your messages. Yes, plans take some work and effort up front but the payoff is significant!
Eric Dickmann
You can't build a house without a blueprint or circumnavigate the globe without a map. Success in marketing is no different. Without a documented strategic marketing plan, you're relying on luck and good fortune. Instead of rolling the dice and hoping for the best, build a plan that can guide your business to the next level of success."
The 90-Day Plan
To start, it is highly recommended for organizations to use a 90-day plan, especially if your organization hasn't created a documented strategic marketing plan before. During this period, you can experiment and spend on different tactics and measure the results. This is especially helpful if you're not exactly sure the best places to attract the attention of your ideal customer. Rather than committing to a long-term channel strategy, do some short experiments to validate your thinking.
Marketing success is all about the incremental adjustments over time that lead to exponential improvement. Marketing is like a science experiment because you have to try things and test the working variables to achieve the desired results. Fitzpatrick explains that there is no such thing as isolated concepts or independent bodies; every aspect and tactic of the business are interconnected and vital for the other's existence. Your marketing plan to attract the target market should be cohesive and supported by each element of your plan.
A Budget is Not a Marketing Plan
It's important to note that a marketing budget is NOT a marketing plan. Spending money on advertising or using creative tools to market your products or services is marketing, but it should never be considered a strategy. A marketing budget is only an element of your marketing plan. Tim elaborates that often people think of long-term planning as overly complicated and that it consumes too much of their time. The reality is that it is essential to develop well defined and goal-driven plans because markets evolve quickly, and customer preferences change over time.
In Tim's experience, especially with small businesses, the owner or founder is often heavily involved in the marketing process. Sometimes, the company hires SEO experts, content creators, and even third-party agencies to promote its presence online. A budget is allocated and tactics are executed based on the available budget. However, despite these efforts, the company fails to achieve meaningful success for the money invested. Why is that? It is usually because there isn't a strategy in place. Instead, tactics are being executed independently without fully leveraging other marketing elements. Just like compound interest grows your savings over time, building a plan that builds on tactic upon another will exponentially improve the effectiveness of your marketing campaigns.
Often, small businesses lack the marketing leadership to coordinate the planning and execution of marketing tactics. This is where the role of CMO comes in or an executive who's sole focus is growing the company. For companies that aren't ready to bring on a full-time executive leader, a Virtual CMO might be the perfect solution.
Determining Your Ideal Customers
Before you start drawing up your marketing strategy, it is crucial for you to determine your ideal customer profile. Tim Fitzpatrick mentions that creating a perfect vision of your dream customers should be the first fundamental part of your planning process. Often, companies think that the marketplace is filled with ideal customers but in reality, this is too broad a way of marketing. Companies should niche down, identify their real target market, and direct their marketing efforts towards the ideal customers in this narrower market.
Finding your target market and identifying your ideal customer profile is just like searching for a lifetime partner. This is because you will be asking for shockingly similar questions such as:
- What do they look like?
- What are their interests?
- Will this person be a good fit for me?
After answering these questions, you will have a clearer picture of what to expect and determine whether you are investing in the right personas or not. Understanding your clients better allows you to build a more intimate relationship with them. It's important to stay updated with their interests and purchasing behavior over time to understand changing preferences.
Be mindful not to focus on many specific criteria. Being overly specific and too narrowed focused can make it very difficult to attract enough attention. Look to the broader market and study the pool of potential customers and then carve out a niche that's small enough to cost-effective but large enough to find a pool of potentially profitable customers.
There are times that, despite your best efforts, your marketing communication turns out to be a one-way street and your target market fails to engage because they are not interested in the products or services you are selling. Remember that the job of marketing teams and services is to generate leads so that companies can convert new customers and grow. If the target market is not enthusiastic in working with your business, there is nothing that these services can do. As Fitzpatrick puts it- "They may be in my target market, but they're not one of my ideal clients." If this happens, the company needs to reconsider its positioning or even the viability of its products or services.
Identifying your target market should be a top priority for all businesses. TOPO shares to us the five benefits of creating an ideal customer profile:
- Identifies the best customers
- Creates alignment across all the departments within the organization
- Guides the creation of a target account list
- Determines how to allocate resources
- Increases win rate and potential return of investment
tim fitzpatrick
Don't skip the fundamentals. You can't expect to stand up to the plate and hit a major league fast ball until you know how to stand, hold the bat, and have the fundamentals of hand-eye coordination. You can't have success long-term without getting the fundamentals in place."
A Simple 3 Step System to Defining Your Ideal Customer Profile
Businesses often cast a very wide net because they aim to target all available business opportunities. Unfortunately, this is an extremely expensive and ineffective way to market that misses out on finding real leads that convert. It's detrimental to the business because they are trying to engage with prospects who might not really their ideal customers. This can lead to dissatisfaction and service problems down the road while consuming too many company resources. Tim recommends three simple steps to define your target market and ideal client:
- Brainstorming- Evaluate your past and current customer base and look for patterns. What kind of customers bought your product? Who were the most profitable? Obviously, you want to target a market that can provide substantial value to your business. If you're going to stay in business, you want to work with the most profitable clients. Be mindful that your biggest clients and highest revenue generators are not always your most profitable. What amount of resource do some of these large clients take? Your ideal customer will be the ones that you want to work with and that want to work with you! And once you have them, you want to keep them satisfied and engaged with your brand. Not only for future sales but for potential referral opportunities.
- Demographics- This focuses on WHO your customers are. Once you have established your perceptions of your ideal customer profile, you can now be more specific with the data by researching their age group, salary range, location, etc. Once these attributes and traits are uncovered, your marketing team can formulate ways to position your brand to appeal to this narrowly defined demographic.
- Psychographics- Psychographics explains WHY people want to work with you. This information reveals the aspirations of your target market. When you understand their thoughts and motivations, you can deliver your message, add value, and provide ways to help solve your customer's problems or fulfill their wants and needs.
Recognizing Your Best Customer
As we discussed, your best customers may not always be your most profitable clients. They may be the ones who are consistently doing business with you but unfortunately, don't always drive the biggest profits for your company. Tim tells us to look at our existing customer base and not focus solely on sales revenue. Revenue from a client doesn't necessarily mean that they're a great client. They may be driving large sales volume, but chewing up significant sales and services resources within the company. The cost of sales and service is an important consideration when defining your best customers. The most important thing is that both the company and the client are happy working with each other. The little old lady who comes into the bank branch every week to chat with a teller and deposit her social security check may seem like a great customer but is she really? It might be the guy who never walks inside but deposits his weekly paycheck at the ATM instead.
The point of going through these steps and carefully considering the factors that make an ideal customer is so that you and your team can be laser focused on the kinds of people you want to target. Unfortunately, many companies overlook the importance of having sufficient customer knowledge and modeling it to their current marketing strategy. Make sure you understand your customer base and profitability model as you craft your strategic marketing plan.
Other Steps to Identify Your Ideal Customer Profile
Here are some steps to consider taking to help identify your ideal customer profile:
- Start with assumptions, then slowly narrow down your focus- Use gender, age, and location to gradually identify your ideal customer profile. These observations will help influence your marketing approach and areas of focus. Keep in mind that age can play a significant role in the purchasing decisions. SmartAsset informs us that in 2020, GenX's spend more than the baby boomer and millennial generation by 41% and 18%, respectively.
- Analyze Your Competition- Most businesses overlook the importance of market research. They tend to focus on developing their product or service instead of scouting their competitors and looking for areas for improvement. While your product or service may be similar to a competitors, you might be targeting a different niche. If that's not possible, you may want to focus on who gives their customers the best overall experience. It should be your goal to build long lasting bonds with your clients. People are often willing to pay a premium over a competitive offering if there's a perception that the higher priced offering comes with a better level of service.
- Talk to people- People want to be heard. Before you start creating your product or service and releasing it to the market, you should do a little market research. Conduct one-on-one interviews, group surveys, or even online forums to gather customer feedback and answer queries. To gather feedback effectively, you should consider implementing the market segment approaches (Geographical, Demographic, Psychographic, and Behavioral). To understand marketing segmentation better, you can read our interview with Rob Ristagno- "Effective Marketing Segmentation Strategies to Improve Your Sales." Remember that even after your product launch, market research is still an ongoing and developing process.
- Create a Customer Persona- This step may be the most technical, but also the most important. Customer personas can help you market your product or service most effectively to your potential buyers. The purpose of this exercise is to understand your client's behavioral and psychological patterns so that you can adjust your marketing strategy to foster engagement. Knowing information such as their monthly income, preferred places to shop, how often they buy, etc. can significantly help your marketing approach.
- Use Analytics and Other Resources- Dig into your data. Understand how long your sales cycle typically will be. How many times does a prospect typically visit your website? How many emails to they open? Do they respond best to videos or other content? By pulling information like this together, you can refine your ideal customer persona and provide meaningful guidance on what areas of your plan need to be built out first.
What is Customer Journey and Why Is It Important?
The customer journey or buyer's journey is just that, it's the path they take from the first time people become aware of your product until they make a purchase. But in reality, the road doesn't end after the purchase. The ultimate goal is to have repeat customers and that requires positive service interactions after the sale.
Tim shares that many companies look at the customer's journey as an hourglass. The hourglass concept of the customer journey was popularized by John Jantsch and has seven phases. You're missing out on several things if you look at the journey as a funnel rather than a buying process. Customers look for specific things to happen at each stage of their journey. Marketing's goal is to help prospects move through that journey more effectively and efficiently, answering their questions, providing value, and building trust. Duct Tape Marketing discusses the seven stages of the content hourglass:
- Know- The key element here is blog content created on a narrowly defined set of keyword phrases and topics. One of the best ways to become known is through organic search. This phase would also include advertising that draws awareness to other, more advanced forms of content such as eBooks and seminars. In many businesses a referral introduction is the first exposure that someone gains to an organization. This calls for content that is geared towards this type of exposure and specifically acknowledges your referral process.
- Like- An eNewsletter can be a tremendous content tool for nurturing during the like and trust building phases as it allows you to demonstrate expertise, knowledge, resources, and experience over time. A series of blog posts around a specific topic turned into an eBook or email series is another great content play that helps tell your story.
- Trust- Once you’ve gained attention you must move towards that all-important next step. We will buy products we simply like, but we’ll rarely commit to organizations unless we trust them. Your customer generated videos, case studies and stories make great content here. Your SEO efforts (others trusting and linking to your content) and Social Media participation comes into play in the trust phase. Getting your customers involved in the content creation game is an essential element and one that many are happy to be involved in. The ability to tell why your organization does what it does in stories that illustrate purpose in action is perhaps the key trust building content piece of the puzzle.
- Try- Try is a phase that many people skip, but I think it’s the easiest way to move people to buy, particularly in highly competitive and highly priced situations. Here the content needs to represent a sample of the end result. This is where eBooks, online and offline seminars and evaluation type processes in the form of content shine. Many people miss this point but this is an audition and it’s where you need to deliver more than anyone could possibly consider doing for a free or low cost version of what you sell. This is one of the first places where you plant the seed for a referral as well as a sale. By producing content in the try phase that clearly demonstrates how much better your paid product or service is than most, you can differentiate your business and create evangelists out of those that don’t ever buy. How to content in the form of videos, workbooks, examples, cheat sheets and checklists – the kind of stuff your competitors are charging real money for – is the stuff that the try phase in built on.
- Buy- Content that converts consists of proof. You must be able to show real results, customer stories and clearly cast your buyer into the future receiving the promised results. Many people miss the idea of content during just after the buy phase because the thinking is that the person has already made a decision and the product or service will speak for itself. The total customer experience is measured by the end result, not the build up to the sale. In order to deliver a remarkable customer experience you’ve got to continue to educate with content. Creating content that acts as a new customer kit or orientation to your business or product is the first step. Most businesses should also consider quick start guides, in-depth user manuals and customer support communities. You can easily build this kind of content with your customers using services such as Get Satisfaction or Zendesk.
- Repeat- Don’t wait for your customer to call you when they need something, stay top of mind through content that educates at a higher lever. Use email and print to start to share how others have gotten more advanced results with your products or services. Create customer events that have a content sharing component. Create a results review process where you help your client measure the results they are actually getting by working with your firm and use this process to capture content in the form of success stories.
- Refer- Start this phase by documenting your referral process. Create tools that make it easy for you to teach your rabid customers and strategic partners how to refer you. Create eBooks, videos and teaching events and offer them to your strategic partners to cobrand and present to their clients. Work with a team of best of class providers (the folks that can help your clients get everything they need) and create a team blog. Create and acquire content that makes it easy for you to introduce your partners and gives them plenty of incentive to do likewise. You don’t have to do all of your content creation from scratch either – there are many ways to effectively use other people’s content as part of the overall picture.Content creation is the hardest job of a marketer these days but when you plan your content with your hourglass in mind it may well be the highest payoff work your can do.
How To Map The Customer Journey
Your marketing plan, including your activities, tactics, and marketing content, should fit your buyer's journey. The goal is to have the right content available for each stage of the journey. Companies often focus many of their efforts on early stage leads and build content to support those stages. However, as the buyer gets closer to the sale, they may need different kinds of content to validate their decision, answering lingering questions, or offer some proof points or references. A good plan will have content mapped that covers the entire buyer's journey.
According to Fitzpatrick, before the business maps its customer's journey, it should first understand the customer's needs, expectations, and potential actions. This can help in determining what content is needed to support each stage. It's also important to note that companies are of different sizes and structures. Each has a different allotted budget for each its marketing strategy, but despite these differences, mapping your customer journey doesn't have to be complicated and overwhelming.
HubSpot lists the five essential benefits of mapping your customer journey:
- You can refocus your company's direction with an inbound perspective
- You can create a new customer base
- You can implement proactive customer service
- You can improve your customer retention rate
- You can create a customer-focused mentality through the company
Tim Fitzpatrick uses a simple spreadsheet to identify his ideal customer profile and map out the customer journey. He allows the client to tell him what their needs, expectations, and reasonable actions might be. Mapping out your customer journey outlines your customer's buying process and list it in a more understandable format. Tim tells us that this process doesn't have to be long and overcomplicated.
Conclusion
Conceptualizing a marketing strategy that identifyes your target market, builds out your ideal customer profile and maps out your buyer's journey are thought-provoking exercises! They are designed to get you thinking about how your marketing activities can best support your overall objectives. To that end, makes sure you have a solid understanding of what those objectives are before you get started. Do you want to grow by 5%, increase you profit margin by 8%, enter a new marketing, capture 5% more marketing share, etc.. Tim encourages businesses and entrepreneurs to be patient with the process and take shortcuts because each stage has a great value and is designed to make your marketing strategy more effective
Live Stream Replay
Resources
Guest Presenter: Tim Fitzpatrick
Tim Fitzpatrick is a content marketer and the President of Rialto Marketing. He is an entrepreneur with over twenty years of experience in marketing, business development, sales management, and strategic planning. Fitzpatrick got involved in mobile marketing at the late-2012 because he saw a great opportunity to help organizations improve by taking advantage of the use of portable devices in the business. After his graduation, he was fortunate to get involved with whole distribution company, which he co-owned for nine years. Currently, Tim Fitzpatrick and his team at Rialto Marketing is focused on helping service businesses simplify marketing so they can grow with less stress. Tim loves mountain biking, skiing, and playing golf with his family.
