One Simple Way To Identify Your Perfect Customer
Every business has some sort of target customer in mind. How do you know if it is the right one? There is a simple way to identify the perfect customer for your business. Are you ready for this? It’s the person that’s already buying from you today!
If you think this is obvious, it’s not. At least it wasn’t obvious to many of the companies I’ve worked with over the years. I’ll give you two real-life examples, one of an actual client and one of a well-known global brand.
One of my clients is an electric bike company that’s been in business for over 5 years now. They started, like many startups do these days, by targeting Millennials. Almost immediately, there was another group of customers that was buying their bikes – baby boomers. In fact, the majority of their sales were going to consumers over 50 years old. It turns out, there is no real urban commuter market for electric bikes in the US just yet (unlike in Europe and Asia).
So did the company quickly pivot to target baby boomers? Not necessarily. It took them some time to shift focus to their actual customers. This startup is not a slow-moving corporate battleship but they were blinded by the idea of a perfect customer being someone other than the person that actual wants their product.
The second example is Toyota. In the late 90s, Toyota was somehow sold on the idea that they have become an uncool car company for old people. The result was the Scion brand, which was supposed to be the cool, rebellious, anti-Toyota brand for the young people. When the first Scion car was first showcased in 2002, the vague definition of a young person was Generation X. The members of that generation were expected to behave radically different from their parents. Then came the Millennials, who are still expected to completely revolutionize consumer culture and buying preferences. Despite its attempt to sell cars to the vaguely defined youth for almost 15 years, by most measures the Scion brand was a flop and it was discontinued in 2016.
So what happened? It turned out that Gen X grew up and started buying Toyotas. The Millennials are on their way to do the same. A lot of this has to do with the fundamental confusion between generational and lifestage differences, which I will cover in my next article. Toyota could be forgiven since they target a lot of different market segments and constantly need a new source of growth. Can you afford to make the same mistake?
The lesson still stands – do not make the mistake of thinking your perfect customer is someone other than the person buying from you today. Understand why you current customers find your products or services attractive and build on that.