How to Identify your Ideal Customer

Some small businesses operate under the belief that any person who is prepared to spend money with them is a good customer. It is only after a particularly bad experience with a demanding customer or an unprofitable accounting period that they begin to question their thinking about customers.

So, who is a good customer for you and your business?

When you sit back and think about it, chances are you can easily bring to mind some of your best customers (people who are willing to pay top dollar up front or on time and require little to no customer service support) who will earn you a lot of money, and some (people who quibble about price all the time, want lots of additional services, products or support for free and complain about everything) who will actually lose you money.

You may find that in your business you have an even number of both types of customers, or more of one type than the other.

To make your business a profitable growing concern, you ideally want to be doing business with people like your best customers, which is where the concept of the Ideal Customer comes in.

What is an Ideal Customer?

An Ideal Customer is a make-believe person that has all the behaviour and attitudes of a person you want to do business with over and over again. This make-believe person can be based on one or more of your best real customers or can be an imaginary being.

By identifying an Ideal Customer for your business or a product (or service) you sell, you can figure out how to attract and appeal to real people like your Ideal Customer.

Because your Ideal Customer is make-believe, it can be difficult to imagine them and keep them in your head when you’re trying to design your business processes or when writing marketing materials.

By writing down a description of your Ideal Customer you get a quick way of refreshing your memory every time you need to re-imagine them.

How to get your Ideal Customer down on paper

Fold a piece of paper in half, on one half write down all the things that make a customer one of your best customers.

Here is a list of questions to get you started –

  • What do they like?
  • What are their problems?
  • What is most important to them?
  • What age and gender are they?
  • What education level have they achieved?
  • What annual income do they earn?
  • What responsibilities do they have?
  • What are their spending priorities?
  • What do they like to do on weekends?
  • How do they decide to buy?
  • How much attention do they need during the sale and after they’ve bought?
  • How much do they spend per transaction?
  • How often do they spend money?
  • How do they prefer to pay (invoice, prepaid, credit card, cash, eftpos)?
  • How do they prefer to be contacted (email, phone, post)?
  • Which charities do they support?
  • Which clubs or organizations do they have memberships with?
  • Why do they buy from you?

Answer as many of these questions as you can and if you come up with other things write these done too.

Now, on the other half of the page you want to write down all the expectations the person you described on the first half page has when it comes to you and your business, or the product (or service) you’re selling. Think about what they do and don’t expect when they are buying.

Here are some ideas you can start with (in no particular order) -

  • Accuracy
  • Use
  • Choice
  • Delivery
  • Appearance
  • Opportunity
  • Availability
  • Practicality
  • Result
  • Convenience
  • Community
  • Legacy
  • Expertise
  • Volume
  • Value
  • Trust
  • Light
  • Entertainment
  • Economy
  • Pace
  • Continuity

The aim of this step is not to limit yourself to what is OK for you to fulfil in terms of your Ideal Customers expectations, it’s to work out what they all are, so that you can make an informed decision about the ones you and your business are able to deliver on.

With this description of your Ideal Customer you’re now equipped for answering some big business questions, like “Where will I find lots of people like this congregating so that I can sell to them?”, “What is the best way for me to tell them about what I sell, in a way that is going to be compelling for them?”, “How much of my current range of products and services is appealing to them, and how can I make them even more appealing?”.

Your Ideal Customer will be unique to your business and if you decide to look at your Ideal Customer for individual products or services you may even discover that they are different at this level too.

As a final step, you could choose to make your Ideal Customer even easier to work with, by giving them a name, a job, a family history and a face (find a photo of a person that looks like the person you imagine – That way, next time you’re sitting down to negotiate the supply of a new product or putting together a new service or simply writing a Telephone Directory ad, you’ve got someone to bounce your ideas off.

Extra Help with Identifying your Ideal Customer

We've put together a Target Market Persona Checklist; it's a document the team here at Solutions Answers Results uses whenever we're undertaking market research and want to better understand customers and potential buyers.

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