“You are not competing directly against your competitors, you are competing to be unique in the marketplace.”
What does your most valuable prospect look like? “Probably a lot like your existing valuable customers. The easiest and most profitable growth will be achieved by adding additional customers very much like your current most valuable customers,” explains Robert Bloom in his book “The Inside Advantage.” Clients you resonate with will bring clients in the same vein. The key question is: Who is your ideal customer – how do you identify and describe them – and how will you solve their problem?
Shifting ideal customers
This wisdom is more relevant now than ever: because of Covid customers have changed. Some have disappeared, others have shifted from in-store to online, and others have increased their purchases. As a result the assumptions you had about your ideal customers may no longer be relevant. And yet: you really need to know your ideal customer if you want to grow your business.
All customers are not created equal. Your ideal customer is an existing customer (not a hypothetical one), buys from you for optimal profit and refers you to other prospects – new customers who are likely to be remarkably similar to your current, ideal customers. Once you have identified your ideal customer you can find out whether there are enough of them to reach your goals – and define whether you need to expand into an additional segment.
Your ideal customer is a breathing, living human being
The thing is: It is not enough to define your customers as a market statistic – you can’t get to know a statistic. You have a much better chance of selling to someone you really know and understand. If you can’t answer the following questions, chances are that you don’t really know your ideal customer:
- How many customers generate 80% of my gross margin, and who are they?
- What is the name of the decision-makers of my top 10 clients, and how much do I know the socio-demographic (e.g. age, gender, background) and psychographic (e.g. lifestyle, risk attitude) profile of each of them?
- How much do I know the needs and fears of each of these decision-makers? What are their desires? What are their pressures?
- How much do I understand the problem of my top 10 customers – not just their surface problem, but also their root problem? Why do they have this problem? Why are they coming to me (and not to my competitors) to solve their problem?
You need to see the image of your ideal customer in your mind based on its definition. Robert Bloom gives the example of clothing chain Gap that, several years ago, “had defined its customer as 18 to 35 years old, an overly broad target that confused designers and merchants within the company.” While it may be easy to understand that 18-years old and 35-years have quite different needs and lifestyles, many of us are tempted just like Gap to define a broad ideal customer – simply because it feels safer.
In reality, in order to effectively drive your strategy, the definition of your ideal customer should evoke a clear picture in your mind of a living and breathing person. A “18 to 35 years old person” is vague, and your team wouldn’t know where to start to develop a strategy to solve this customer’s problem. On the other hand an “image-conscious single woman in her 30s who wants to look and feel better with little investment in time or money” gives your team a much clearer direction of her problems and what to do to solve it.
Getting to know your ideal customer – and therefore your ideal prospect – doesn’t need to be complex: with the right tools you can create a colorful picture of your ideal customer in a couple of hours by leveraging the collective intelligence of your leadership team – which will help refocus your strategy.
Brand promise: your solution to your ideal customer’s problem
Your brand promise is the answer to the question: how do you solve your ideal customer’s main problems in a differentiated way? Your brand promise maps your ideal customers’ biggest challenges with what you do best. As such your brand promise serves as the framework for how you design your organization, systems, and processes to deliver on this promise. And obviously your brand promise is central in your communication to prospects and clients: “This is what you get when you do business with us.”
The key questions to define your brand promise are:
- What are the top 3 problems you can solve for your ideal customer?
- What do you offer to solve each of these problems?
To make sure that you have a real promise, not a slogan, define one or multiple measures to make sure that you deliver on your promise.
A crisp, vivid description of your core customer, a deep understanding of the problems that they face, and a clear alignment of your leadership team on which problems you will solve and how, are the starting point for your growth strategy. Because of Covid, you may need to revise this starting point.
“The No. 1 thing that has made us successful by far is obsessive compulsive focus on the customer as opposed to obsession over the competitor,” according to Amazon’s founder Jeff Bezos. “Why? There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invention on their behalf.
I talk so often to other CEOs and founders and entrepreneurs, and I can tell even though they’re talking about customers, they’re really focused on competitors. If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”
I work with growth-minded CEOs who are frustrated by the way their business is growing. Often they spend their days fighting fires – typically a sign that their company has outgrown their management approach. In short: they feel stuck. I know the feeling: I have been in their shoes when I was running a business that we turned around from sales decline to double-digit business growth.
As a business coach my passion is to help leadership teams define their actionable business growth strategy, create a culture of accountability and effective strategy execution, and become better leaders – so they can grow faster and with less pain.
If you too want to grow faster and with less pain, contact me now: Xavier@AmbroseGrowth.com.
What about you? How well do you know your ideal customer? How much has your core customer changed due to Covid? How do you leverage your knowledge of your ideal customer’s key problems to drive your strategy?