a step-by-step guide to defining your target market · a step-by-step guide to defining your target...

A Step-by-Step Guide to

Defining Your Target Market

The Ultimate Guide from

2

A Step-By-Step Guide to


Introduction

When you’re starting a business, knowing who you want to sell to is more important than knowing what you want to sell. Even if you have a product in mind, identifying your target market is key to your business success.

In this guide, we’ll walk you through the steps of how to identify your ideal customer and use that as the foundation for your business.

3



Introduction 2

Chapter 1 Why Should You Start With Your Target Market? 4

Chapter 2 Get to Know Your People 14

Chapter 3 Finding Your One Person 25

Chapter 4 How to Use Your Ideal Customer 51

Conclusion 61

4



Chapter 1 Why Should You Start With Your Target Market?

If you’re like most entrepreneurs, your business started with an idea. Usually, the idea has to do with what you want to offer. You see a problem you could solve, or you have something of value you want to offer the world. Either way, the center of your idea is you—your product or your service.

That can be a good way to start thinking about your business, but it’s not a good way to launch your business. In fact, 98% of businesses that start this way fail in their first year. And a lot more of them never gain traction and break significant numbers in income, forever spinning their wheels and never truly taking off.

What’s wrong with this approach? It puts the cart before the horse. If you have an idea for a product or a service and then try to figure out who will want to buy it, you’ll

5



spend a lot of time spinning you wheels. Here at Mirasee, we believe there’s a better way: starting with your target market—even before you have a product in mind.

How to fail at business

The biggest problem with the product-first model is that it relies on you understanding the market so deeply that you can identify the problem and build the solution all by yourself. Nowhere does it even suggest that your target audience might not be aware of the problem, or that they might perceive it in a different way.

It doesn't take into account if the people you're making the solution for are willing (or even able) to pay you for it. For example, does an oil sheikh need a renewable energy source to diversify his energy infrastructure? Probably. Can he pay for it? Sure! But will he pay for it? Probably not.

The second problem with building your product first is that it demands a significant investment of time and money to build and market your offering. An investment that, might we remind you, has a 2% chance of paying off!

6



As you can see, this approach offers you lots of hard work with a slim chance of success. Those who get behind it will tell you that starting a business is supposed to be hard, that it's supposed to be risky. They’ll tell you that it's their way or the highway.

And they'd be wrong.

Let's assume for a moment that you don't want to charge in blindly and build a product that might appeal to nobody. But you still want to build a profitable business. What do you do then?

Is it hopeless? Do you have no other recourse except taking gigantic risks and investing tons of money?

There is a better, safer way, which is actually more profitable in the long run. And the core of it is this: start with your target market.

7



Start with the people, not the offer

Instead of trying to identify problems and come up with solutions all by yourself, why not listen to the people whose lives are already influenced by those problems? People who are already wishing for solutions to their problems.

Problems like:

8



And thousands upon thousands of others. Why try to come up with something yourself, when there are crowds of people eager to tell you what they want?

If you start with your target market, it becomes a lot easier to start a business.

You're no longer staring at an insurmountable “I have to make something really awesome to solve problem X that I'm sure exists, and then lots of people will see how awesome my product is.”

Instead, you have a much more manageable task of “I need to find a group of people I can help, and then find out what they want to pay me for.” It’s not as dramatic... but it’s a lot less less hit-and-miss!

Still not convinced?

9



Here are a few more reasons why your target market should be your point of departure when designing a business idea:

1. Finding a core audience of people and solving their existing problem is going to be much easier (and cheaper) than designing a product or service from scratch.You can validate your offer quickly, and go from zero to significant income in less than one month. This means that the potential downside and the risks you’re taking stay small early on (unlike in a traditional business model).

2. Focusing on helping people instead of selling a pre-existing product means that you develop a life-long relationship with your audience. They will become your core customers, which means that you can sell lots of different products to them for a long time.

10



Mistakes to avoid

Starting with your target market is easier than the product-first approach, but this method has plenty of pitfalls, too. Here are some of mistakes to avoid with the people-first approach:

1. Don’t focus on demographics alone. Remember, we are trying to identify the problems that exist in your target market. Information like gender, age, ethnicity, and income level is useful, but very limited. In addition to demographics, you need to focus on psychographics: things that matter to your target market, their primary concerns, their opinions about the world, and the worries that keep them awake at night.

2. Don’t try to be original. You’ll be selling people a solution to a problem they already have, not your assumptions about what you think they need. If you look at all the successful online businesses today, you will notice that very few of them are truly original. Once you have some established income, then you can try and break new ground.

11



3. Don’t look for markets with no competition. Lack of competition, or weak competition, means that there’s little to no money in your space. Ideally, you want fierce but incompetent competition. A good example would be any freelance marketplace - it seems cutthroat and oversaturated, but it’s actually really easy to stand out and beat 99.99% of competition, because most of the competition just isn’t very good.

4. Don’t try to appeal to everyone. Everybody is different, and what seems like a unified group of people (small business owners) will actually have vast differences between different subsets (the owner of an independent barber shop has very little in common with a butcher). If you pick “women,” or even “young women” as your target market, you’re just asking for trouble. It’s good to go narrow. The more specific, the better.

12



5. Don't create a phantom market. It's possible to invent a "target market" that doesn't actually exist. If you already have a pretty clear idea of the product you want to sell, you might be tempted to invent a market around the product you want to create. That's why it's better to focus on the problem you want to solve instead of the solution you want to offer -- the best solution might be different from what you come up with before you have your target market defined.

6. Don’t pick a group based on what you want to make. The whole point of this guide is for you to find people you can help and develop a long-term relationship with them. You can’t reach out to a market and ask them to buy whatever you’ve made without earning their trust first. That’s the traditional approach, and we don’t want to be traditional: it’s wasteful and ineffective.

13



To recap:

The traditional “product-first” approach demands a lot of time and money upfront, and it has a very low chance of success.

A quicker, better way to start an online business is to find a group of people whose problem you can solve, and build a meaningful relationship with them.

This “Audience-first” approach lets you validate your business idea much faster and start generating income quicker than trying to sell products or service that aren’t guaranteed to succeed.

While picking your target market, avoid common pitfalls like focusing on demographics only, striving for originality, being too general, and avoiding areas that have competition.

14



Chapter 2 Get to Know Your People

At this point, you have a good understanding of why it’s important to find your target audience—and to start with that first, rather than your product. However, it’s good if you also have an idea about the kinds of problems you want to solve, or at least the issue you want to address. Knowing that will give you direction as you narrow down your target market.

If you have no idea what issue or problem you want your business to address, we recommend Tad Hargrave’s book, The Niching Spiral, to get you started. Once you have a general issue or topic you want to address, you can start thinking about who’s affected by the issue—which will lead you to the person you can help.

http://nichingspiral.com/

http://nichingspiral.com/

15



Finding Potential Categories of Target Markets

For now, let’s start with broad categories. Suppose you know you want to address the problem that small businesses have finding good, affordable programmers. There are a lot of people who are affected by this issue, or who could be influenced by it:

Small business owners and hiring managers who don’t know where to find good talent

College graduates with computer science degrees who don’t have the real-world skills they need to work as programmers

Older workers who want a second career and think learning programming would be an easy way to get a great job

Programmers in other countries who are highly skilled and happy to work for lower wages, but who don’t have the English communication skills to get hired by U.S.-based companies

As you can see, each type of person affected by this issue could lead you to a different potential business idea.

16



Now think about the issues you care about, and make a list. Think as wide as possible: consider the people who are most frustrated by the problem, but also include the people who cause the problem and the ones who are affected by it in various ways. Right now, don’t edit your list—all of these people are potential target markets for you.

If there are several different issues or problems you think you might to address with your business, make lists for all of them! Right now your goal is to think about all the different possible people you could target for your business. Later, we’ll narrow it down.

Once you have a long list (5-10 different categories of people for each issue is a good place to start), it’s time to start thinking about yourself.

17



Identifying Business Opportunities

At this point, you have a list of a lot of different categories of people. All of these people are affected in some way by an issue you care about, but that doesn’t mean all of them are good target markets for you. The key to a good target market is to find the right combination of three things. First, you want a group that is similar to you in some way, so you can relate to them and understand them. But second, you also want a group that’s different from you in several key ways, so you’ll be able to help them. And third, you want a group that you’ll enjoy working with for a long time—not just for your first product or service, but for the life of your business, or at least the first few years.

To identify the best target market for you to start with, you’re going to look at your list of people and compare each group to you. Consider your own passions, experiences, interests and skills, and think about how you relate to each group of people you’ve listed. For each group, ask two questions:

How are you similar to this person? How are you different from this person?

18



Your similarities with your potential target market will give you ideas about how well you can relate to them. It will also help you think about whether you want to work with them—most people enjoy connecting with other people when they have things in common.

On the other hand, your list of ways you differ from your target market will show you where your business potential lies. It’s hard to start a business serving people who are exactly like you, because you won’t have any additional knowledge, skills or expertise to offer them. (It can be done, but you’ll need to first solve a problem you share with them, and then sell them the solution.) The best business opportunities often lie in the ways you’re different from your target market. To go back to the example of programmers above, maybe your programming experience could enable you to teach recent graduates real-life skills, or maybe your ability to communicate cross-culturally could enable you to interface between overseas programmers and U.S. businesses.

Once you have a list of the ways you’re both similar and different to your potential target audiences, it’s time to rate them. There isn’t a mathematical way to do this, because it depends as much on your gut feeling as on numbers. But if you look at each group, you’ll see you have several things in common with them as well as several

19



ways you’re different from them. For each group, look at those lists, and then start to brainstorm.

What are some potential ways your differences could enable you to help this group of people? What could you teach them? What could you give them? How could you serve them? Go ahead and brainstorm some ideas. These aren’t going to be your final business ideas (we’ll get to that in the next chapter!), but they will be a starting point for you to think about whether there are business opportunities for you in this market.

What commonalities between you and this group of people will make it easy for you to relate to them? How do you connect with them? How many people from this group do you know personally? If you don’t know anyone from this group personally, that could be a red flag—it’s going to be hard for you to judge whether you will enjoy working with them or have any real way to help them.

What differences between you and this group will make it hard for you to relate to them?

20



How much do you like this kind of person? Do you enjoy interacting with them and being around them? Remember, these people are going to be the foundation of your business, so choosing people who you sincerely like is essential!

After you’ve thought through all those questions, it’s time to make a commitment. Remember, this isn’t a final commitment—as your business grows and changes, you’ll expand to other target markets. But for now, it’s time to choose the one group of people you want to choose as your foundational target market as you launch your business.

It’s okay—in fact, it’s a good idea—to take a few days to think about this if you need to. But remember, too, that you won’t be excluding the other groups—you’ll still be able to reach them and help them as well, and you might find that your main target market changes as you grow. Right now, you just need a place to start—and that’s what your first target market will give you.

21



Drawing the line

This is an optional step, but one that will save you a lot of grief in the long run...

What you’ve done so far is define the people you want to work with. Sometimes, however, it’s just as vital to be honest with yourself and think about people you don’t want to work with.

After all, why have your own business if you can’t have the final word on which clients to keep... and which to turn down? Being clear on this is going to be better for you, for your business, and for everyone involved.

Think about the customers you’d rather not work with: on ethical grounds, for the sake of your sanity, or for any other reason.

For example, some businesses don’t ship their merchandise internationally, to avoid unnecessary costs and possible incidents with lots or damaged shipments. Do they lose a lot of revenue doing so? You bet. Is it still worth it, from their point of view? Of course it is.

22



It might seem borderline rude to exclude potential paying customers. But consider what this is really about: running your business in a way that’s best for you. If that means not working with some people, so be it.

And in case you’re worried about your income suffering, don’t be. For example, Ramit Sethi doesn’t accept customers with credit card debt… and his company still churns out multiple seven figures in revenue every year, and growing.

Of course, these rules aren’t set in stone. As time goes on and your business evolves, you can reconsider these standards, making them more (or less) stringent. Some customers, you will discover, are unbearably low-value and high-maintenance. Others might be average spenders, but a pleasure to work with.

It’s always up to you to decide what kind of people you will surround yourself with. Don’t let anybody tell you otherwise.

http://www.iwillteachyoutoberich.com/

http://www.iwillteachyoutoberich.com/

23



To recap:

Your target market can be one of many different categories of people who are affected by the issues or problems you care about. Thinking about all the different people who are affected by an issue is a good way to start brainstorming potential target markets.

You can narrow down your target market by looking at how you are similar and different from the people you’re considering. This will help you identify good business opportunities, since your target market should have enough in common with you for you to easily relate to them, but it should also be different enough from you that you have something to offer them.

Oftentimes it’s just as helpful to know who you’d never work with. Excluding people from your target market is fine: first off, it’s good for everyone involved. Second, you can always make an exception, or even change your mind about your standards!

24



Ready to make a commitment? Great. Now that you’ve chosen a group to be your broad target audience, we’re going to go deeper—a lot deeper. You’re going to break it down from a target market to just one person: your ideal customer.

25



Chapter 3 Finding Your One Person

Now that you’ve narrowed your target market down to a specific group, you might think you’re ready to start thinking about your product. But you’re wrong. Because the best target market isn’t a type of person, and it isn’t a group of people. The best target market is actually one person—your single ideal customer.

Why is this important?

Most entrepreneurs aren’t willing to narrow their market down this much. If you’re like most people, you’re probably thinking of a lot of arguments against this right now:

If I try to market to just one single person, I’ll be leaving out too many people. I’ll never be able to build a business when the market is so small. If I stay more general, I’ll have more potential customers.

26



I don’t want to work with just one kind of person. I want the variety that comes with several different types of clients, and I’ve had business success with very different types of people in the past. I don’t want to have to choose one.

I think the product or service I can offer will appeal to a lot of different people. I don’t want to drive people away who would really appreciate what I have to offer.

Now, in the past, some of these arguments might have been valid. In the first peak of mass marketing and advertising in the 50’s, the market was limited enough that you didn’t have to choose a single person for your ideal customer. In those days, it was enough to know the type of person your customer was. You could narrow it down to a group, not a single person.

If you wanted to sell shoes, for example, you could specialize in shoes for young, professional women who worked in offices and needed to walk comfortably while using public transportation. Because the market was less saturated, and potential customers had less access to your competition than they do now, that level of target customer was enough.

27



Today, however, things are different. The presence of the internet means you’ll never be the only business around. What’s more, it means that if you want to stand out, it’s not enough to have the best product or service. Nowadays, when people are looking for something, their needs have evolved past wanting something “good enough.” They want to buy what's exactly right for them.

“In a world of infinite choice, if something isn't made specifically for me, I'm gone.” ~ Ramit Sethi, Money + Business Essentials for Creative Entrepreneurs

What does that mean for you when picking your target market?

It means you need to get inside their heads. You need to understand, not just who they are and what they want, but how they feel and think.

When you do that for a single person instead of a type or a group, you’ll discover that your single person—your one ideal customer—is actually many people. And thanks to the Internet, all those people—the thousands of people who are your one ideal customer—will be able to find you.

28



What’s more, once those people find you, the others will too. As your business grows, you’ll naturally draw plenty of people who aren’t exactly your ideal customer, but they’re close. They’re friends with your ideal customer, or they’re similar in some way, or they see how much your ideal person benefits from what you offer, so they want it too.

You won’t be leaving these people out. You just won’t be targeting them—not at first. Later, you can expand to target more people, and even to have multiple customer profiles.

But for now, let’s start with one.

http://www.firepolemarketing.com/multi-passionate-customer-profiles/

http://www.firepolemarketing.com/multi-passionate-customer-profiles/

29



Get to Know Your People in Their Own Words

In the last chapter, you narrowed down your target market to a group. Now, you’re going to narrow it down to your one ideal customer. You’re going to find out what they think and how they feel—and you’re going to do it using their own words.

To do that, first you’ll need to find them.

There are a lot of ways you can find people who fit your target market group profile:

If you’ve worked with clients or customers in the past, you can look at specific people you’ve helped before.

If you don’t have any past clients, then turn to your personal network: friends, family and work contacts.

If neither option gives you access to people in your target market, you can look for them online. Comment sections of niche blogs, forums, Facebook or LinkedIn groups, Reddit... there are plenty of communities where your target audience could be hanging out.

30



Later, when you’re developing your product, it will be good for you to talk to as many people as possible about the problem you want to solve. But right now, you’re not trying to expand your knowledge—you’re trying to narrow it down.

Keeping that in mind, you'd better go deep and not broad. You don’t have to gather lots of data, just find one person that fits your profile well, and learn as much as you can about them. The best way to get into people's heads is to have an honest talk with them.

If the thought of interviewing people scares you, don’t worry—we’ll walk through how to contact them and what to ask. But first, let’s decide who you’re going to interview.

If you’ve already done some work with people in your target market, then past clients or customers is your best place to start. It doesn’t matter if these clients paid you or not—if you did volunteer work with the people you want to serve, that’s just as good!

Your goal here isn’t to figure out what you’re going to sell; it’s just to figure out who you’re going to help (and eventually sell to). So think back through your notes and ask yourself:

31



Are there specific people (former clients or customers, or people you worked with as a volunteer) you know personally, who are involved with the problems you want to solve? Would they fit into your target market? Make a list. Try to think of at least 10 people.

Were any of these people difficult to work with? Did you dislike any of them? Cross them off the list.

Were any of them especially great to work with? Do you really enjoy them? Move them to the top of your list.

If you’ve never worked with anyone in your target market, then think about your friends, family and acquaintances. Do you know anyone personally who might fall into your target market? Add them to your list.

Then go back to what you’ve written so far about your target market, and take everyone off the list who doesn’t fit—or who you just don’t like. Remember, you’re creating your ideal customer. So it’s important that you like them and enjoy working with them!

32



If there’s no one in your personal network who might fall into your target market, then it’s time to look online.

Are there forums for people similar to your ideal customer? Google keywords related to the problem you want to solve and add “forum” to your search. For example, if you want to work with runners, search for “running forum” “best runners forum” or “running community.”

Are there blogs for your target customer? Read them, and read the comments. The blog owner could even be your ideal customer!

Are there Facebook groups, subreddits, LinkedIn groups, or other social media communities in your chosen space? Read through them.

Don’t spend a lot of time doing this—you don’t need to collect a lot of data from these forums right now. Right now, your goal is simply to find a few people who could help you develop your ideal customer profile.

33



You’re looking for 3-5 people who fit into your target market and would be willing to talk with you about themselves. And since you want these people to match your ideal customer, your gut instinct reaction to them is just as important as the facts about them.

For example, if there’s a friend who might be perfect for your target market but who you just don’t like very much, take them off the list. If you read a post in a forum that just rubs you the wrong way for no reason, cross that person off your list. You don’t want an ideal customer who you like a bit—you want an ideal customer who you love.

Again, your goal is to narrow your list down to 3-5 people who will be willing to actually get on the phone and talk with you. Here are your criteria for choosing the right people:

They fit into what you currently know about your target market. They’re connected with the issue you want to address, and they fall into the group you identified as your first target market

34



You like them and you would enjoy working with them

You have a way to connect with them personally, and they’re likely to be willing to talk with you

Once you have your list of around 5 people, it’s time to reach out for personal interviews.

But what do you say?

“After all, everyone's favorite subject is themselves.”

~ Neil Strauss, The Game

35



Getting the Interview

If the person is your friend, it’s easy to reach out—you probably talk with them on a somewhat regular basis. If they’re a former client or customer, it shouldn’t be hard, especially since you’re targeting people who are your ideal customer—which means they like you as much as you like them.

For a former client, you can say something like this:

Hey [Name],

Hope you’ve been doing well since we last talked! I’m working on expanding my business a little more, and since you were one of my favorite customers, I was wondering if you ’d be willing to talk with me and answer a few questions. Basically, I want to define who it is I can best help with my work. W ould you be willing to set up a time to talk with me so I can ask you a few questions about our work together? It should only take about 30 minutes, and I ’d love to see you and buy you a coffee. :)

Thanks, and let me know!

36



But what if the person you want to reach out to is a stranger? In that case, you’ll need to connect with them based on what you have in common: the issue you both care about.

Hey [Name],

I saw your post in [forum] about [topic], and I really loved what you had to say. I really agree with you about [something you said].

I’m thinking about starting a business related to [topic], and I ’m trying to talk with a few people who understand this issue to find out more about what they think about it. W ould you be willing to set up a time to talk with me for about 30 minutes to share your thoughts about [issue]?

Thanks! Let me know— I’d really love to hear more about what you think.

It may take a few tries, but most people will probably be willing to give you thirty minutes of time to talk about an issue they care about.

37



What to Ask

Now that you’ve got some conversations lined up, what are you going to ask?

Your goal for these interviews is to get information about your ideal customer. When you finish the interviews, you’ll be able to write a detailed description of your ideal customer—using her own words to describe herself.

So what do you need to know about your ideal customer? You’ll be asking about three main categories:

1. Demographic information: age, gender, family, income, job, and other statistics 2. Everyday life: schedule, concerns, stresses, and what she thinks about and cares

about 3. Mental and emotional state: hopes, beliefs, fears, and ideas—especially as they

relate to the issue or problem your business is going to address

The most important thing for these conversations is to keep them as open-ended as possible. Remember, you’re not trying to define your solution, or even to figure out what problem you’re going to solve yet—right now, you’re just figuring out exactly who the person is that you want to serve.

38



Start with the basics: find out how they think about themselves and describe themselves. Traditionally, these are very basic questions like gender and age. But you’ll get more valuable information by finding out how your ideal customer describers himself and thinks about himself.

Start with basic demographic questions if you don’t already know the answer (it is useful to know that your target customers are all 30-something women!), but make sure you get more detailed and valuable demographic information, too. Ask questions like:

Do you live with anyone, and if so, who? What’s your job? What do you like and dislike about it? What is your house like?

39



Once you know the basics about your person, it’s time to go a little deeper. For the second stage of your interview, you’ll find out more about your customer’s life and concerns with questions like this:

What’s the first thing you think about when you wake up in the morning? What do you love about your job, and what do you hate about it? What’s your morning routine like? How about your bedtime routine? What’s the most interesting thing that you do every day? What’s one thing you do every day that you wish you could avoid? What do you think about before you fall asleep? Who are your best friends, and why are they great? Who are the people that really annoy you?

Questions like these will give you some insight into how your person feels, thinks and sees the world. They’ll also give you a lot of insight into what your person’s daily life is like—which will be really valuable later, because your business can solve a problem they encounter on a daily basis.

40



Finally, delve into your person’s hopes, fears, and dreams. At this point, you’ll want to make sure you get into their thoughts about the issue that you plan for your business to address. Even though you don’t know yet exactly what problem your business will solve, you know the general area or issue, so you can find out their thoughts on the topic.

You can also start to find out what their “pain points” are—the areas of the problem that really bother them. Solving one of these pain points is usually the easiest way to launch a new business.

Ask questions like:

What do you love about your life? What bothers you most about your life? What bothers you most about this issue or problem? Why are you concerned about this problem? If you could wave a magic wand and fix everything about this problem, what

would it look like and what would your life be like?

41



As you’re planning your interviews, make sure you be respectful of people’s time. Choose a few questions that you think will give you the best value. On average, each question will take about 5-7 minutes to answer, so if you told the person the call will take 30 minutes, then plan to ask about 6 questions. Keep an eye on the clock as you talk with them, and wrap up the conversation when the time is up.

If possible, it’s a good idea to record the conversations so you don’t have to take notes. This will enable you to pay attention to what the person is saying and have a real conversation instead of a structured interview. Use your questions as a starting point, but listen to what they’re saying, and ask different questions as they come up.

And don’t worry: you’ll find it’s not too hard to get people to talk about themselves, especially if the conversation is centered around a topic they care about!

“Everybody is interesting when they are interested in something.” ~ Amy Poehler

42



Creating Your Ideal Customer Profile

You’ve talked with several people, and you’ve gathered a lot of information. Now, you’re going to pull it all together to create your one ideal customer profile.

Remember, you’re not just targeting a type of person now—you’re targeting one single person. But it doesn’t need to be a real person, and in most cases, it won’t be. In some cases, you might want to pick just one person—especially if they’ve already been your client or customer—and use them as your ideal customer. But usually, an ideal customer is a combination of several people. So now that you have all this data, it’s time to pick and choose.

43



Demographics

Demographics are the most basic facts that will get you closer to defining your target market. Things like age, gender, income level, family size, employment status and others aren’t meaningful in and of themselves, though. What they do is provide context for the needs and motivations of the people you hope to connect with.

First, look through the demographic information you have—from both the individuals you interviewed and the people you researched in the last chapter—and identify some trends.

For example, are most of them women or men? What’s the average age of your target customer? Where do most of them live? How much money do they make? All of this information isn’t as important as the way they think and feel, but it will influence how you talk with them and what assumptions you make about your customer.

Once you’ve gone through the demographic information, you’re going to choose which ones apply to your ideal customer. Remember, you don’t have to pick the average—your goal here isn’t to create a profile of a person who fits into all the boxes; it’s to create the profile of the one person who’s perfect for you.

44



If most of the people you talked with are 30-something women, but you really want to work with 40-something women, that’s okay. Are one or two of the women you found in the age range you want? Then there’s probably a market in that age range, too. Make your ideal customer 45—at least for now—and you can change it later if you need to.

Decide where your ideal customer fits in each of these categories:

Gender:

Age:

Race:

Household income:

Family members:

Single/Married/Divorced:

Location:

Go ahead and give your ideal customer a name:

45



Psychographics

Now that you’ve written down the most basic facts about the people you want to target with your online business, it’s time to get into the fun stuff: psychographics. This is where you go deep into your target audience’s head and figure out what they care about, and what motivates them.

Your goal here is not so much to construct a painstakingly accurate psychological profile, as much as figure out the core motivations behind what your target customers do, and how they think.

Start by going through your notes from the interviews. Find things your interviewees said that resonate with you. These could be phrases, words, or descriptions that illustrate what your customer feels or thinks.

And don’t overthink this—you don’t need to wonder whether these phrases and statements are accurate, because you got them from your potential customers. So all you need to do now is find the statements and phrases that feel meaningful to you—the ones you connect with.

46



As you’re doing this, pay attention to words or phrases that were said by multiple people. These are probably thoughts and feelings that a lot of your potential customers feel, so make sure you include them in your profile.

Putting It Together

Once you have your psychographic phrases and words chosen, go back to your demographic information, and combine all of this into a description of your person. Include details about their day-to-day life, and include as much information as you can about how your person thinks and feels about the problem or issue your business is going to address.

47



Here’s an example of a customer profile written by Megan Dougherty when she founded her website, Paying for Life.

Recently Graduated from College or University. Underemployed. They have a job that is unrelated to their passion. They are willing to sell out, to a certain degree, to finance their lifestyle / projects, but resent that fact, and want to get out of what they are doing.

They find this difficult because they are not earning enough money (or are using it too badly) to be able to afford to follow their passion fully. These passions can include, but are not necessarily limited to: artist/musian/writer/activist/traveler/scholar/. This passion takes up a significant portion of their free time and usually late at night. They are working in customer service in some way, because the hours are flexible and the remuneration is the highest possible for the least amount of emotional investment.

They frequently find themselves short of money, despite working full or close to full time. They have pricy social lives, they frequently go out to bars,

http://www.payingforlife.com/

48



restaurants, shows, plays or their friends ’ houses. Drinking will almost always be involved. Much of their “after-rent” income will be devoted to social expenses.

They are socialists, dislike the government, large corporations, organized religion and anyone who tells them to stop screwing around and get a real job. They feel frustrated that they did the “right” thing by going to college and it turned out wrong. They do not trust that hard work will get them where they want to be, or believe that the best way through life is to graduate, get a career, marry, buy a car and house, and have kids, although they know a few people who have done this.

They have debt: student loan or credit card or both. They make the minimum payments but little more. They try to avoid thinking about it, because it seems overwhelming. They rent their urban apartments, and usual bills include smartphone, internet and utilities.

They pirate television and movies, but buy music (as long as it is available for direct purchase from the artist). W hile they are broke, it is situational, not generational.

49



Your customer profile describes your ideal customer—the person you really want to work with and help. It also includes a lot of information about how your customer sees the problem you’ll be addressing with your business and how he views the problems and issues in his own life.

What’s more, this profile describes all this using your customer’s own words. This is really valuable, because when you start writing your copy for sales pages and other marketing to tell your customer about what you have to offer, you’ll be able to use your customer’s own words to describe how you can help.

But keep in mind: this customer profile is just a starting point. As your business grows and as you refine your niche, your customer profile will grow and change, too—and that’s okay. Here are a few of the ways your target market might change in the future:

You’ll learn that this customer doesn’t really exist, or not exactly in the way you described him, so you’ll revise your description to match the customer base that’s really interested in what you’re doing

50



You’ll discover that the person you are most effective at helping is different from who you originally thought, so you’ll change your profile to match the people you’re really serving.

You’ll decide you want to expand your business, but you also want to keep serving the customers you already have. So you’ll add a second, different customer profile to use in addition to your current one.

All of these changes are normal and okay—they’re just part of the development of your business as you grow. Your first customer profile is a starting point for your business, but it’s not the destination!

“The aim of marketing is to know and understand the customer so well the product or service fits him

and sells itself.” ~ Peter F. Drucker

51



Chapter 4 How to Use Your Ideal Customer

If you’ve done all the work in this report up to this point, congratulations! You have a clearly defined target market, and you’ve got a clear, accurate description of your one ideal customer.

But there’s still one important piece you’re missing: now that you have your target market, what do you do with it?

Your target market is the compass for your business: everything you do in your business will ultimately come back to your ideal customer. From your products and services to your branding and marketing, keeping your customer the priority is the surest path to business success.

So let’s look at some of the ways your ideal customer will take center stage as your business develops and grows.

52



Solve a problem your customer really has

“Authentic marketing is not the art of selling what you make but knowing what to make. It is the art of identifying and

understanding customer needs and creating solutions that deliver satisfaction to the customers, profits to the producers and benefits

for the stakeholders.” ~ Philip Kotler

This goes back to how an audience-centric business model is different from a traditional product-centric model, which we discussed in Chapter 1. Now that you know who your target market is, it should be clear how much easier it is to create products that address your customer’s needs, instead of trying to find an audience for a pre-existing offering.

53



Here are a few of the ways you can use your target market to come up with new ideas for products and services you can sell:

Look at the specific problems and concerns your ideal customers talked about in interviews. Can you solve any of the issues they talked about? That’s a great product, because it’s a felt need that your customer already knows she has and talks about wanting to solve.

Look at your customer’s daily life and find the pain points. These are moments when problems arise that your customer might not be aware of, but that she still experiences as challenges. Are there times during her day when she’s regularly stressed, upset, or worried? Can you do something to make those moments go more smoothly? That’s also a great product idea, because even though your customer doesn’t know what the solution is that she wants, she does recognize the discomfort in her situation, so she’ll be likely to see the value in the solution you offer.

54



Look at the places in your conversations when your customer became really emotional, passionate or excited. These will show you topics that your customer cares about a lot and feels deeply about. These could be opportunities for you to solve a problem or to provide delight—either of which can be a great foundation for a new product.

Here's a great example of how your audience defines the nature of your products and services. Back in the early days of Mirasee, we tried to come up with a paid program specifically for our audience... but failed the first time around.

Our initial program was called (ironically enough) “Marketing That Works,” and it flopped miserably. We didn't listen to our readership, and rushed to create something that wasn't a must-have for our audience. Predictably, very few people became paying customers, and we had to abandon the program.

But then our second paid program came along. It was a huge hit that generated over $100,000 in sales – and the best part is, it had precious little to do with marketing! It was a blogging course called “Write Like Freddy,” and our audience loved it, as we knew they would.

55



So what was the key difference between the embarrassing flop that was “Marketing That Works” and the runaway success of “Write Like Freddy”? Simple: second time around, we listened to our readers, and came up with the exact program they have been asking for.

You see, Danny Iny, our founder, wrote a staggering 80+ guest posts in his first year of running Mirasee, to promote the company and get the word out. And people noticed – he got bombarded by emails from readers, all asking the same thing, “How can you put out so much great content so quickly? You're like Freddy Kruger—wherever I look, you're there!”

The nickname “Freddy Kruger of Blogging” stuck, and Danny developed his “Write Like Freddy” program after a quick email survey and a pilot launch to validate the idea.

56



See your business the way your customer does

Another key way that your target market shapes your business is in your positioning and marketing. These have to do with the way you brand yourself, how you compare yourself to similar businesses, and the language you use to describe your products. Let’s examine each of these in a little more detail, and look at how your target market will shape them.

Positioning refers to your place in the market. As you position your business, you’ll look at your competition—other businesses who are solving similar problems—and you’ll look for a unique way you can address the problem.

In order to do this, you’ll need to view your business—and your competitors—the way your ideal customer sees them. You’ll look at businesses similar to yours and ask:

Who is this business for? What problem do they solve?

57



You’ll answer these questions from the perspective of your ideal customer. This will give you a clear sense of which of your competitors are actually for someone quite different from your target customer (and therefore aren’t really competitors), and which are solving problems that your ideal customer doesn’t really have. As you look at what’s available from the perspective of your ideal customer, you’ll see opportunities you might have otherwise missed.

Even after you’ve clarified the problem your business will solve, your target market will be important as you consider your branding and marketing. You’ll need to use colors, images and language that resonates for your ideal customer, so every marketing decision you make, from your website branding to the language you use on your sales pages, should be made with your ideal customer in mind.

58



You’ll also go back to your interviews (and probably do more interviews), so you can use your ideal customer’s own words to describe the problems he has and the solutions he’s looking for as you create your marketing language.

“It can feel unnatural to speak concretely about subject matter we ’ve known intimately for years. But if we ’re willing to make the effort we’ll see the rewards: Our audience will understand what we ’re saying and remember it. The moral of this story is not to “dumb things down.” The manufacturing people faced complex problems and they needed smart answers. Rather, the moral of the story is to find a “universal language,” one that everyone speaks fluently. Inevitably, that universal langu age will be concrete.” ~ Chip Heath, Made to Stick: W hy Some Ideas Survive and Others Die

59



Change your ideas as you learn about your customer

Finally, neither your business nor your target market will ever be set in stone. You might discover that the problem you thought you could best solve for your target market isn’t the one that your customer really wants solved right now. Or you might find that the solution you think will work best isn’t as effective as you anticipated. As you develop new products and services for your business, your target market will be the guide that keeps you focused.

Many of today's great companies started out with less-than-stellar ideas about what type of product or service they should provide to their target market. The reason they became so profitable and influential, while other companies faded into obscurity, was their readiness to iterate and change according to the needs of their customers. These companies were dedicated from the very beginning to provide the best, most suitable solution to what their target market struggled with.

Here's a perfect example: Airbnb. Everybody knows this company, and what they do: connect travelers with people who have space to rent. But they didn't start out this way.

60



Airbedandbreakfast.com (that's what it was called back in the day) used to be just a website where people could book a place to crash in San Francisco. Their “accommodation was 3 air mattresses for $80 a night each. And the “added value service” was that you'll get breakfast, too (hence the name).

Then, the founders changed the central idea of the service to providing accommodation for conference attendees who didn't want to stay in a hotel. And instead of renting out their own space, they got in touch with owners of other properties.

Soon, Airbnb became the company we all know, helping travelers score unique and affordable accommodations around the world: from village cottages to treehouses, medieval castles, and everything in between.

Airbnb's founders weren't afraid to take new directions, if that meant that their target market would be better served. And that's why they are world's biggest accommodation provider right now... who don't even own any!

“The price of doing the same old thing is far higher than the price of change.” ~ Bill Clinton

61



Conclusion

The path to a thriving online business begins with defining your target market: the people who will make up the core of your audience, and whose need will determine the product or service you offer.

If you take the opposite route first, and develop an offering before finding the right people to serve, your business will be in a world of trouble long before it becomes profitable. This “audience first” approach is the best way to ensure that you'll be working on something people genuinely want.

We hope this guide has given you the know-how and the tools to find your future audience, and become intimately familiar with their biggest struggles and concerns.

Remember: your target market isn't something you have to settle for once and for all. It's up to you to redefine and re-discover your perfect audience. They don't have to conform 100% to everything you've decided for yourself.

And at the end of the day, what matters is aligning your strengths with the needs of your audience – and we did our best to help you with that! It's up to you to take action, and build the business you've always wanted.

a step-by-step guide to defining your target market · a step-by-step guide to defining your target...

Documents