November 1, 2010

Many small business marketers try to be all things to all people and find it hard to really focus or get good at serving narrowly defined market segments.

Actually I don’t think they really try to be all things it just sort of happens from a lack of focus and a prospect on the phone asking for some help in an area that’s not really your thing.

While it may seem like growth to take on a new customer, if that customer isn’t a good fit, it can actually stunt real growth and may even create detractors that expected something other than what you were able to provide.

I think most businesses are suited to serve a narrowly defined market segment best – kind of like a sweet spot. It’s doesn’t mean the sweet spot won’t grow, evolve and change altogether over time, but at any given time there exists a set ideal client or engagement for most businesses.

The trick is to discover what that ideal client looks like in the most specific way possible and then go about building your entire marketing strategy around attracting more of them.

Before I go much farther, let me say a word or two about the term ideal. For some, this might simply be a subset of folks that can afford what you offer, but for others this might make up one of the six or eight clients you intend to work with long term to help them gain a result. In the latter, you probably better be working with people that are a perfect fit or life may get miserable.

A perfect fit may mean that they have the kind of need you really can help with, but it might also mean that they value your unique approach and treat you and your staff with the respect the relationship deserves. A multiple red flag client, taken because they said they would pay you, will suck the life out of a small business faster than most any other dynamic.

A less than ideal client can also come in the form of a person that you would love to work with, but they just don’t really have the need that matches what your business does best.

Below is my step-by-step approach for helping organizations discover their ideal client with an eye of creating a communication plan with them in mind.

Profitable First

If you can, create a spreadsheet of your clients and focus on the amount and type of business you do with each. You might even rank them in order from most to least business over the last three years.

Now, carefully comb through the list with an eye on profit. Which are your most profitable clients? Are there entire types of work or types of clients that traditionally produce unprofitable sales? I know it sounds crazy, but most business take on work that in the light of day ends up being a waste of time at best.

The key is to understand the most profitable work. Is it a certain product or service, type of engagement, or even a challenge that you enjoy solving the most? (This often a good time to resolve to get rid of work that you know is no longer profitable.)

Now Add Referrals

Now let’s divide that list again. From the profitable work identify clients that are known referral sources. Here’s what I’ve found to be true. Only happy clients refer and happy clients are most often found because you or your approach is a good match for what they needed.

This narrow group of profitable clients, the ones that also refer, holds the key to discovering your ideal client profile.

Demographics are Outbound

From your group above it’s time to start looking at the physical characteristics that are known about your ideal client group. You’re looking for any common characteristics that are shared.

Marketers call this ‘demographics’ and often stop here and go buy a demographic selected list to do some outbound marketing. While I think demographics, such as age, income and even zip code, can be important, they are only a part of the story and are useful in an outbound marketing kind of way.

Behavior is Inbound

The secret to attracting, as opposed to hunting, your ideal client is to understand what makes them tick, what triggers them to go looking for someone like you, and what behavior they typically exhibit that might act as another marker for you to focus on.

This is the essence of attraction and how marketers create inbound marketing paths to their business. For example, if you know your narrow market enjoys tech-related conferences, you might show up at a few of these or even work to get on the stage. If they are active in civic or non-profit causes you might look to create partnerships with these types of organizations.

The Biographical Sketch

Finally, once you are able to pull together profit, propensity to refer, demographics and behavioral markers, you have the making of what I refer to as the ideal client biographical sketch.

The idea here is that you create a picture of your ideal client through the use of words and images that is so rich, just about anyone could conjure up a vision of such a client. The key question to answer for yourself and then ultimately for your staff, partners and referral sources is this – How would I spot your ideal client?

You may have different profiles, and that’s OK too, just give them different attributes and name them – either Bob and Susie or Needy and Squeezy.

If you draw a picture to accompany the  “how would I spot” question and then hold that picture as the filter for every marketing decision – “Would this appeal to Bob?” – you’re on your way to building a business that every ideal client will recognize is built just for them – and that’s something people will pay a premium for.

Image credit: garryknight

Join the conversation ( 5 )

• Woman In Leadership 5 months ago

  

  Excellent article. It is important from day one for anyone new to business marketing to figure out their target market. Otherwise, it will be an exhausting task being all things to their customers.
  
  Stacie Walker
  WomanInLeadership.com

• Julie Rains 1 year 3 months and 0 days ago

  

  Great article. I especially like the discussion of the inbound behavior and the recommendation to craft marketing messages with the ideal client in mind.

• Malte Holm, MBA 1 year 3 months and 3 days ago

  

  Great post John. Once again highlighting the importance of this laser focus. All to often we forget how important it is and waste time hunting prospects that are not really "ideal" for us. Regards, Malte

• Andy Andrews 1 year 3 months and 6 days ago

  

  I agree, because getting to know your client first and setting your strategies according to their needs will allow you to offer a more client-oriented service.

• Wendy Harrington 1 year 3 months and 18 days ago

  

  Thanks for this. In addition to these excellent recommendations, I'd add a few more thoughts... Yes, profitability is job #1, and we also need to be sure it's based on more than just one transaction and/or established over a realistic time frame based on the business' type, cross-selling or upselling opportunities, etc. Referrals are a good indication that the customer was happy with us, but we also want to know that the client's referrals are of other high-value customers who also meet our "ideal" definition (e.g., respect our team, value our contributions, have appropriate budget, have growth potential, or whatever).
  
  I think the hardest, most important, and most underrated and underused step businesses can take is to create that sketch of the ideal customer. It helps us everywhere from product development to marketing messages, and customer service to social media strategies. Let's spread the word! Thanks for all you do for small businesses.