Finding the RIGHT target customers

This information is taken from a talk by Marianne Berkovich at the NASDAQ Entrepreneurial Center.

You built the world’s best product then need to figure out who will buy your product. When you ask someone about their customers they usually mention gender and age range. However, their lies the problem. If you keep your customer base so broad, you are unable to reach the people that really will benefit from your product. Let’s say your target audience is women ages 20–40. While that may only be 2M in New Zealand (which is still large) that is at least 55M in the US, which is A LOT of people to target. Additionally, not all women ages 20–40 have the same interest in your product. The more you focus on what customers do, have and feel, the better chances of finding your target customer. These customers will help determine your ideal market, product development and marketing roadmaps.

Marianne says in order to talk to the right people: focus on behaviors, not demographics. This method is more applicable to B2C companies to help identify your customer over B2B companies, although some of the same principals can be applied.

Here are three key pieces to think about to find the right customer. We will use ClassPass as an example, an app to find and sign up for fitness classes near you.

1. What do your customers do?

• What activities or actions are relevant to your product or service that ALL of your customer do or have done?
• How long have they been doing it?
• How often do they do it?
• ClassPass- attend exercise classes at least once a week

2. What do your customers have?

• What physical objects do they own?
• What relevant context or situations do they have?
• What intangible things do they have?
• ClassPass- have a smartphone

3. What do your customer think or feel?

• What are they dissatisfied with or frustrated or annoyed by?
• What are they excited for or hopeful about?
• What beliefs do they share?
• Classpass- like going to a variety of exercise classes, are frustrated with limited choices at their gym.

When you are putting this list together, think about these few questions and if they apply, you’ll need to create a set of characteristics for each group:

• If you have a two sided marketplace, think about the seller and buyer
• Are you serving multiple types of users?
• Your user may not be the purchaser

Once you start putting together this list, you can start surveying your customers (sample survey here) and reaching out to people that meet your criteria. While putting together ideas of what your right customer is, there will be lots of assumptions and hypotheses. Therefore go out, talk to customers or give them a survey and once you listen to their problems you will see if your solution is fitting it.