How to Identify Your Ideal Customers

by | Nov 6, 2023 | Branding, Essays

Knowing your ideal customers is the key to building a successful business.

The more you know them — the challenges they face, the results they are after, how they think and feel, and the type of experience that gets them to refer you to others — the easier it is to develop the systems and campaigns that attract, convert, delight, and keep them for the long term.

Most businesses fail because they try marketing their product or service to a group of people they know nothing about.

  • Their messaging doesn’t resonate
  • Their positioning is off
  • Their product doesn’t solve a deeply felt pain
  • Their experience is lackluster at best
  • Their pricing is either too high or so low it seems fake

Knowing your ideal customers brings clarity to everything you do in your business.

So, where should you start, especially if you don’t know who those ideal customers are?

We’ll uncover that answer throughout this essay:

But the short and sweet answer to that question: start with the customers you already have.

Ideal Customers versus Target Market

Before we dive into identifying your ideal customers, we need to clarify some verbiage.

Most marketers, CEOs, and founders use the terms “ideal customers” and “target market” interchangeably.

While they are similar, or, more accurately, one is a subset of the other, they are different.

Target Market

“Target market” refers to any prospect who COULD buy your product or service.

They have the budget to afford your product or service, have the problem your solution solves, are in the right industry or vertical, and meet all the qualifications to be a customer.

Consider using these parameters to narrow down your target market:

  • Budget – can they afford your service?
  • Size – are they big enough to want your service?
  • Structure – is the business structured well enough to need your service?
  • Industry – does industry matter?
  • Revenue – do they bring in enough money?
  • Problem – is the problem painful enough to pay to solve?

Ideal Customers

“Ideal customers” refers to any prospect you WANT to work with.

They are a subset of your target market that you wrap your branding, marketing, and sales efforts around.
Consider these parameters:

  • Personality – what personality meshes well with your company?
  • Values – what values do you both share?
  • Mindsets – what mindset do they need to have to work with you?
  • Trust – what level of trust in your business or solution do they need to have?
  • Payments – how quickly will they pay
  • Refers you – how often will they refer you to others?
  • Management – will they micro-manage you?
  • Your Parameters – anything else that will make them ideal?

Subtle, but huge difference here.

ideal customer vs target market

Example of Ideal Customers

Let me give you an example to clarify what I mean.

Let’s say you’re selling an analytics platform for gaming companies.

Your target market might be gaming companies with an annual revenue of $1M that focus on interactive mobile games.

Any company that meets those criteria COULD buy from you.

But your ideal customers might be gaming companies with annual revenue of $1M that focus on interactive mobile games and have a passion for educating their clients through their games and giving back to their local communities.

In this example, you’d take any customer in your target market, but your brand messaging, marketing, and sales efforts would be focused on finding gaming companies that focus on education and giving back to their communities because you’ve found those are the companies you enjoy working with the most.

Again, subtle difference, but huge when it comes to enjoying the customers you work with.

Identifying Your Ideal Customers

Now that we’ve clarified what an ideal customer is, it’s time to look at how to identify who are your ideal customers.

There are two ways to start this process, depending on which is true of your company:

Go ahead and select which statement is true of your company. You’ll jump to the part of this essay that applies to your company.

1a. Start with Current Customers

The easiest place to start is with your existing customers.

However, this process only works if you have current customers that you want more of.

When we build brand strategies for our customers and we spend time getting to know their ideal customers, I always start by asking a simple question:

Which of your current customers would you want 100 more of?

  • Which customers do you enjoy working with?
  • Which customers pay you on time?
  • Which customers trust you?
  • Which customers value your team?
  • Which customers refer other companies to you?

The customers you love now are your ideal customers.

So start with them.

Look for any trends you find that are true of all of them:

  • Demographics — company size, industry, job title, revenue, structure
  • Psychographics — personality, values, mindsets, beliefs, interests
  • Desired Outcomes — what problem are they trying to solve?
  • Desired Experience — how do they want to interact with your solution?
  • Greatest Fears — what are they afraid will happen without a solution?

Look for any trends you find among those current customers.

Those trends will serve as the foundation for understanding your ideal customers.

1b. Start with the Problem

If you don’t have current customers that you’d want more of, or you just don’t have current customers, the best place to start identifying your ideal customers is by looking at the problem you solve.

Do a deep dive into your offer and ask yourself two questions:

  • What problem does our offer solve?
  • Who feels that problem the deepest?

The key here is to figure out who feels that pain the deepest.

If they only feel a mild annoyance or a minor inconvenience from that problem, they are not your ideal customers.

People don’t spend time and money to solve mild annoyances.

You want to find the people who feel the pain of that problem on an incredibly deep level. The problem should keep them up at night, give them headaches thinking about it, and make them worry they will lose everything if they don’t solve that problem immediately.

Make a list of every title and type of business that feels the pain of that problem.

Your ideal customer is hiding in that list.

2. Determine Your Target Market

Next, you want to go broad and determine who makes up your target market — anyone who COULD buy from you.

A word of caution here. Everyone is not your target market.

Neither is:

  • every business owner
  • every solopreneur
  • every director
  • every woman
  • every CXO

If every is in your description, you don’t have a target market.

Narrow your target down using the following criteria:

  • Budget – what parameters indicate that they can afford your service? Think through yearly revenue, marketing budgets, and profit margins.
  • Size – how large of a company do they need to be to benefit from your service? Think through company and team size, especially if you sell to a specific department within a company
  • Structure – what business structure lends well to needing your service? Think through whether the company is privately or publically held, founder-led, or has a dedicated team you can sell to.
  • Industry – is there a specific industry that needs your service the most? Think through the industries that could benefit from your service.
  • Revenue – what level of revenue do they need to make to benefit from your service? Look for trends in the level of revenue a company needs to make before they invest in your service.

Uncovering these parameters will give you a clearer image of the companies that make up your target market.

Document all of your findings in a Customer Persona Template, like ours that you can download for free.

3. Define What Makes Your Customers Ideal

Now the fun begins!

Looking at the details you uncovered about your target market, it’s time to answer the most important question you’ll find in this whole essay:

What makes a customer “ideal”?

Before you rush into an answer, consider these parameters:

  • Personality – what personality characteristics mesh well with your team?
  • Values – what values do customers need to share for the project to be successful?
  • Mindsets -what mindset do they need to have to work with you?
  • Trust – what level of trust in your business or solution do they need to have?
  • Payments -how quickly will they pay? This can lead to the structure of the business – if they require a 2-month processing time for invoices, they might not be ideal.
  • Refers You – how willing are they to refer other companies to you?
  • Management – did they show any signs of micro-managing during the discovery and sales cycle?
  • Your Custom Parameters – are there any other parameters that help you determine if a customer is ideal

Do a deep dive to uncover the characteristics and quirks that make a customer ideal.

ideal customer checklist

A warning for you here: be realistic.

Every company wants to work with the likes of Apple, Google, or Microsoft.

That doesn’t mean they are your ideal customers right now.

If you’re launching a startup with 3 employees, no experience in the field, no case studies to share, and little to no processes in place that a company like Google would expect to see, you are aiming too high.

Now, that’s not to say that in a few years, you won’t land Google.

But saying your ideal customers are all Google-sized when you don’t have the internal structures and processes in place to handle a Google is foolish.

Dream big, but be realistic.

Once you do, grab that same Customer Persona Template and update the fields with the information you nailed down about your ideal customers.

4. Talk to Your Ideal Customers

Once you have your ideal customer persona laid out, it’s time to talk to them.

That’s right — get some of your ideal customers on the phone to validate the assumptions you made and get to know them more.

You will be tempted to skip this step. It takes time, can feel awkward, and you have 100 other things on your plate that need to be done NOW. I get it.

Resist that temptation.

When designing an ideal customer, you are making a lot of assumptions, and basing your brand strategy, marketing, and sales efforts on assumptions is a surefire way to waste time and money.

Primarily, you want to ask questions that validate your assumptions:

  • What is the size of your company?
  • What is your annual revenue?
  • Who makes the buying decisions?
  • What problems are you facing?
  • What type of solutions do you naturally turn to for that problem?
  • How have you tried solving that problem on your own?
  • What outcome are you hoping to achieve?
  • What do you look for in a solution to this problem?
  • What do you consider red flags from a potential partner?
  • Add your questions here!

Remember, you want to validate if the assumptions you made are true, so ask questions that either confirm or deny the information you have in your customer persona.

If you have current customers who are ideal, you might also want to ask:

  • Why did you choose our solution?
  • What challenges were you facing?
  • Why did you reach out to us?
  • How did we help solve your challenge?
  • What could we have done better?
  • What outcome were you hoping to achieve?
  • How did you find us?

Those questions will give you insights from people who already know and (hopefully) like your business and your solution.

5. Iterate

After you’ve talked to a handful of your current and potential customers that you consider ideal, it’s time to iterate.

Go back to your Customer Persona Template and:

  • Add in any trends, details, problems, personality quirks, or characteristics that you initially overlooked.
  • Tweak the details you had that were off.
  • Highlight the details that seemed most important.
  • Note any insights that may help you improve your offer, operations, marketing, or sales efforts.

Then, I want you to do something bat-sh*t cray-cray.

Create a reminder to do some more interviews in 6 months. 🤯

Trust me, if you’re as obsessed about your company or your team as I am, your business will adapt and grow a lot in 6 months — meaning you’ll likely need to adjust your ideal customer persona as well.

Schedule another round of interviews for 6 months to ensure your understanding of your ideal customers is still correct.

Uncover Your Ideal Customers

You now have a clear path to uncover and identify your ideal customers.

Before you begin, I recommend getting your hands on the following resources:

Using these resources while following the process I laid out above will help you not only identify your ideal customers, but also gather the insights you need to create branding, marketing, and sales strategies that will attract, convert, delight, and keep them.

If you need more help uncovering your ideal customers, consider booking one of our brand strategy packages. We’ll get to work identifying and uncovering insights about the customers you want to target.

 

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