Research, Define, Visualize and Target.
"Get closer than ever to your customer. So close in fact, that you tell them what they need before they realize it themselves" – Steve Jobs
As a niche value creator, you will have an audience or a market that needs/wants your product or service – a large enough group of people that have an interest and see value in what you have to offer, and decide to consume it for a price. Profiling your ideal customers and understanding them well is one of the most critically important things you’ll need to do before developing and launching your product or service.
Before we get into identifying and defining ideal customers, let’s first go through the terminology that is commonly used interchangeably across the business and marketing disciplines, but is actually more nuanced and contextual in nature. There are all kinds of stakeholders within a business ecosystem that can be broadly or narrowly described as ‘customers’. There are consumers and customers, users and buyers, personas and archetypes, and then there are target markets and market segments. There are internal and external customers and then there’s the question of suppliers who may also be consumers.
This may feel a bit like I’m splitting hairs but sorry, I disagree with Shakespeare. A rose by any other name is still a rose and nomenclature is an important aspect of clear and strategic communication. For starters it helps in clarifying who they really are. So, let’s unpack these definitions and make some relevant distinctions, because depending on your niche it can be quite useful to consistently call your ideal customers by the appropriate name so you can find your ideal customer.
Consumer vs User
Buyer vs Customer
Persona vs Archetype
Target Market vs Market Segment
#1 Consumer vs User
The words Consumers and Users are very similar and can be used interchangeably. You can ‘consume’ media and ‘use’ a phone, or you can ‘consume’ a perishable food product and ‘use’ a delivery service. We see the application of these words more frequently in certain industry sectors. For instance, the word ‘Consumer’ is adopted more commonly in retail while ‘User’ is adopted more commonly in the UX context in Tech.
#2 Buyer vs Customer
Here again both ‘Buyers’ and ‘Customers’ purchase your products or services for a price. However, they may not be the end consumer or user of your product or service. They may be the primary or initial group of people that you need to sell or market your product or service to. While most buyers would by default be customers, not all customers are necessarily directly responsible for the purchase of our goods or services. For instance, an organization that procures goods and re-sells them may be described as a ‘Customer’ but the individual or group of individuals responsible for making decisions around the purchase may be described as the ‘Buyer’. In a business-to-consumer context the customer and buyer may be one and the same.
#3 Persona vs Archetype
A persona is a profile, a character sketch, a semi-fictitious description of your buyers or end users. You would typically give them a name based on their personality type. Personas allow you to look at a personal representation of your users and come to a better understanding of what your real users’ needs and goals look like in real moments of their lives. Personas require you to look at who your users actually are. Archetypes are models, symbols or characters that display certain patterns of behavior that are common in human experience so once you’ve defined your buyer persona you can create a set of archetypes for a broader profile that any one of your users might fit at any given time. So, Personas look at behavioral and psychological aspects and are more qualitative in nature while Architypes rely on data numbers and create patters of similarity. In other words personas fit within broader archetypes.
#4 Target market vs Market segment
We used to lump people together based on similarities in buying behavior and make huge assumptions about their preferences. Today, with the availability of data, there is acknowledgement that every customer, consumer, user, buyer is actually unique and may display completely different preferences and behavior based on a vast range of markers that differentiate them.
A target market for your product or service is a specific audience that you want to reach. Market segmentation is the process of further subdividing the target market into smaller groups that may exhibit demographic and psychographic similarities. Segmentation allows more personalized and customized interactions with existing and prospective customers. Target markets are researched more from a marketing context while market segments are useful for specific sales targeting.
So, once we have established our business idea and found our niche, the next step is to get to know our customer well enough to anticipate and serve their unmet needs. There are two strategic tools we can use to define and visualize our ideal customer.
The Ideal Customer Profile (ICP)
The Buyer Persona (BP)
Let’s look at the differences and relationship between the two before we get into specifics of what information they each should include:
Ideal customer profiles describe a target market, while buyer personas define specific kinds of people in that market.
Ideal customer profiles describe existing customers, while buyer personas are based on new leads and prospects.
Ideal customer profiles are used by marketing teams, while buyer personas are used by sales teams.
Ideal customer profiles are for business-to-business sales teams, while buyer personas are for business-to-consumer sales teams.
Here is a great article from HubSpot that explains the ICP and BP from a Small Medium Enterprise/Business-to-Business perspective and how their CRM tool delivers value.
To create robust Ideal Customer Profiles and Buyer Personas, you need to start with research. For ICPs you can access industry research online through various published sources. Buyer personas on the other hand will require more in-depth 1:1 interviews to uncover the real needs and possible barriers that the buyer may have. You will want to be clear on the segments and the number of personas that you are solving for.
How to create your Ideal Customer Profile (ICP)
An ideal customer profile (ICP) is a description of the company or customer that is the perfect fit for your product or service. An ICP is based on characteristics such as industry, size, revenue, pain points, objectives, and behaviors. An ICP helps you target and retain the customers who bring the most value to your business and are most likely to buy and use your product. If your product or service is targeted to organizations rather than individuals, your ICP will be a more generic overview of the organization with a view to finding a product or service fit for that organization and is generally used in account based, customer relationship management.
You will find a vast array of Ideal Customer Profile Templates on the internet that you can use to tailor to your specific needs. Many of these combine the ICP and the Buyer persona.
How to develop a Buyer Persona (BP)
A Buyer Persona focuses on the individual involved in the buying decision. In some instances, there is a chain of individuals who have different levels of decision making in the buying process and they may have different needs or motivations. So while a buyer persona will contain demographic information, it puts greater emphasis on the psychographic aspects of the individual, for example, their motivators, pain points, desires, preferences, goals, media consumption details etc. It focuses on the buying process with the intent to understand how to make this a frictionless as possible and remove any barriers to purchase. A word of warning. It is easy to get sucked down the rabbit hole of creating too many different profiles which can make things overly complicated, so you need to prioritize.
Again you will find a wide selection of Buyer Persona templates on the web that you can use for inspiration and tailor based on your target audiences.
How detailed customer profiles and personas help you find your ideal customers
They help you define and finetune your value proposition
They help design products and services that meet real customer needs
They help anticipate, innovate and serve future needs
They help design an outstanding customer experience
They help with designing growth strategies and tactics
In future posts I will do deeper dives into each of these topics.
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