In the last few blogs we have been exploring the idea of using insights to develop winning strategies. In continuation of this series, today we delve into an approach to defining your target customer. In the last blog we argued that focusing on select target customer groups and understanding the specific needs and preferences is crucial for marketing success.
Some businesses are clear about what groups they want to target while others are still grappling with the idea of their ideal customer. This article may provide fodder for thought to the second group as it delves into a step-by-step approach to identifying the ideal target customer segment.
1: Harness internal knowledge and experience
People who have worked on the business and the brand, develop their own understanding of customers and customer needs. Their experiential knowledge is valuable as it provides insights into not only customers but also deeper understanding of internal objectives, dynamics, market context and more.
It also lays the ground for building alignment around a common view of the ideal customer. Ideally you should explore the question of ideal customer group(s) with key team members across various functions, including sales, services, products, innovation, and marketing. One can bolster the internal understanding by studying the internal data on customers – sales data, past research etc.
2: Map Industry Trends and Shifts
Understanding industry trends and structural shifts is important to understand emerging customer groups and their attractiveness to the business. This process also helps formulate hypotheses and refine further investigation. Delve into industry reports, market analyses, and expert opinions to uncover patterns and emerging trends that could inform your understanding of your target audience.
3: Speak to different customer groups
There really is no substitute to listening to customers. To develop a thorough understanding of all the possible customer segments in the market, it is good to speak to a cross section of potential customers – across geographies, relevant socio-economic groups and recent purchase behaviours. It is important to listen to current and past customers as also customers who have never bought from you.
Adopt a variety of interview methods to capture a comprehensive understanding of your target customers. Utilize individual interviews for in-depth exploration, couple interviews to gain insights into shared decision-making, and group discussions to learn from group exchanges. Don’t forget to include conversations with influencers, such as contractors and dealers, who can provide valuable perspectives on customer groups they deal with.
4: Brainstorm to build a common understanding of the target customer
Developing an understanding of the ideal customer group is all the more powerful when you build ownership of the idea within your organization. One way to do this is to facilitate a workshop where you share your insights on existing customer segments in the market and brainstorm to develop a common understanding of ideal customer segment (s) for your brand. This workshop can also help develop a shared understanding of emerging customer needs and develop actionable marketing strategies.
5: Socialize the idea of focussing on target customer segment(s)
It can be useful for you to compile the insights from this entire process in a crisp and compelling presentation to share with internal stakeholders. This presentation should present the argument for focusing on the ideal customer group – their needs, motivations & anxieties, their affinity for your brand and their impact on current and future revenue and profits for the brand. This presentation can also detail the roadmap for future marketing efforts with this target customer group.
We have shared a comprehensive approach that can help business leaders and marketers can effectively identify their target customer segment, enabling them to craft tailored marketing strategies to drive growth and success. Following this process is crucial for a comprehensive and accurate understanding. However, if resources or time are a constraint one can develop a starting understanding by speaking with internal stakeholders and mapping industry trends. Understanding target customers is not a one-time endeavour; it is an ongoing process that requires continuous refinement and adaptation.