Defining your ideal customer helps your company focus its marketing, improve profitability, serve customers better, and protect your team from unnecessary work.
When everyone knows exactly whom you serve best, your company can direct its time, energy, and money toward attracting more of the right customers.
In EOS, this is part of getting clear on your Target Market: who your ideal customer is, what they care about, and what message will appeal to them. That clarity usually does not exist when a company first starts.
When you first start a company, it’s normal to see nearly everyone around you as a potential customer. Friends, family members, and almost anyone you meet may become part of your early sales efforts. That works for a while, and it does not scale.
As the company grows and adds a sales and marketing team, the activity increases. Still, the company may lack clarity about where to focus and how to get the best results.
There’s a better way: clearly define your ideal customer.
Why Define Your Ideal Customer?
Imagine that your company has 240 customers. Unfortunately, not all of them are ideal.
Your ideal customer is the one you’d like to clone, the customer you’d gladly serve again and again. Defining that customer matters because when you treat every person or company as a potential customer, you’ll struggle to send a clear, consistent message about whom you help and what you do best.
When you try to serve everyone, you rarely serve anyone especially well.
I’ve lived in Barcelona for 24 years, and several times I’ve seen a company van with a sticker that literally says, “We do everything.” You might laugh, and many companies take a similar approach. They try to please and serve everyone.
At my first company, we defined our ideal customer as someone between 35 and 55 years old, along with several other characteristics. We quickly realized that much of our marketing spending didn’t align with the customers we wanted more of.
We were using channels like Facebook and Instagram with messaging that didn’t resonate with our ideal customer. Once we identified the mismatch, we made significant changes, saved a substantial amount of money, and increased our conversion rate.
The wrong customers can create problems throughout the company. They may require extra work, reduce profitability, force your team to change established processes, and leave your team unhappy. Over time, they may damage your reputation and burn out the account managers who serve them.
How to Define Your Ideal Customer
Your leadership team should define your ideal customer using three factors:
- Geography
- Demographics
- Psychographics
In simple terms: Where are they? Who are they? What are they like?
Geography: Where Are They?
Geography defines where your ideal customer is located. That may be the entire world, one country, a region, or a city.
Consider factors such as language, culture, transportation costs, advertising channels, and brand awareness.
For example, an architecture company I worked with defined its ideal customers as businesses located within a two-hour drive.
Demographics: Who Are They?
Demographics define the basic characteristics of your ideal customer.
For an individual, those characteristics may include age, income, profession, or interests. For a company, they may include industry, number of employees, revenue, or the products and services it provides.
For example, one consulting company in the food industry defined its ideal customers as large companies with testing laboratories.
Psychographics: What Are They Like?
Psychographics describe your ideal customer’s mindset, goals, concerns, and aspirations.
This is often the hardest part of the exercise, and it may also be the most valuable. When you understand what matters to your ideal customers, your sales and marketing messages can speak directly to their concerns and connect with the emotional factors that influence buying decisions.
For example, a pharmaceutical company defined its ideal customers as businesses seeking quality, personalized service, reliability, and innovative products.
When I put all three factors together, my ideal customer looks like this:
A company near Zürich or Barcelona with 10 to 250 employees that wants to grow, feels stuck, is respectful, is willing to be open and honest, and wants help.
Keep the Focus
Once you define your ideal customer, focus your marketing, sales efforts, processes, and systems on serving that customer well.
The goal is to focus your efforts like a laser. Every activity designed to attract new customers should align with the customer you want more of. Actions and expenses that fall outside that focus will usually produce weaker results.
One company took this discipline a step further with a list it called the ‘Dirty Dozen.” Once a year, they review their customer list and identify the 12 customers who are the weakest fit.
Then they take one of three actions:
- Help the customer follow the expectations and processes that support the relationship.
- Raise the price enough to make the account profitable.
- End the relationship.
Ending a customer relationship is tough. Staying focused on the right customers can lead to stronger profits, more satisfied customers, fewer complaints, less extra work, and happier employees.
Where to Start
Bring your leadership team together and brainstorm the three parts of your ideal customert: where they are, who they are, and what they’re like.
This work should involve the entire leadership team, not simply the marketing team. Marketing may attract and sell to the customer, and the rest of the company must deliver what marketing promises. Everyone needs to be aligned.
Once you’ve captured your ideas, refine them into a clear description. Then communicate that description across the company so your people can align their processes, systems, sales efforts, and marketing activities around it.
Some companies even create a visible profile or avatar of their ideal customer and display it in the office. This daily reminder helps the team stay focused on who they serve and how to make that customer happy.
When you clearly define your ideal customer and stay true to that definition, you create more focus. Your message gets clearer. Your team does less unnecessary work. Your company gets stronger.
Ready to get clear on your ideal client and gain traction in your business? Schedule a 90-Minute Meeting with an EOS Implementer to learn how EOS can help your leadership team get aligned, focused, and moving forward.
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