The Importance of Finding Your Best Customer
Us marketing types like to repeat the phrase:
KNOW YOUR AUDIENCE
...over and over again. But the questions that you ask and how you ask them are the key to making sure that it's the right audience.
Is there such a thing as a WRONG Audience?
Short answer: YES. Longer answer: there are often multiple audiences or customers you could be focused on, but some are better for you than others. Here is an example.
A company in a highly competitive market - let's say meal kit delivery subscriptions and let's call them "Happy Tummy Co." - needs to get the word out about their service. They see that their competitors are all targeting similar audiences and offering deep discount coupons, so they jump in to do the same. It starts out great with LOTS of conversions and new customers ordering their service, but as time goes on, they realize that these new customers aren't sticking around. Though they are definitely a good market for short-term conversions, they are not signing up for the right reasons. They get their coupon, then move on to a competitor. This audience is all about the deals. They'll never keep them without suffering a big long-term loss.
In other words, Happy Tummy Co. has been focused on growing awareness with the wrong audience.
Happy Tummy Co. has been focused on growing awareness with the wrong audience.
So, instead of following along with their competitor's tactics, they decide to dive deep into their data and figure out which of their customers stay the longest and have the longest lifetime value. Once they isolate the customers with the highest lifetime value, they dive into finding out if they have anything else in common: who are they? What is their lifestyle? Why did they choose Happy Tummy Co. over the competition? Why aren't they tempted away by the coupons? Where did they find out about Happy Tummy Co.? They find out that most of these customers didn't use a coupon and aren't incredibly price sensitive. They really like that Happy Tummy Co. has healthy choices and lots of flexibility. Many of them tried the competition, but settled on HTC. They get a wealth of information from these customers and build a longer-term marketing strategy to find and win over more like them.
They now know who their BEST CUSTOMER is and, instead of spending money on getting in front of the wrong customer, they can focus their efforts on building relationships with their best customer.
How do you find YOUR BEST CUSTOMER?
I talk a bit about this in the video embedded above, but the way that we define YOUR BEST CUSTOMER is:
Has the greatest need or desire for what you are selling. In other words, you don't have to work too hard to convince this audience to buy.
Is willing and able to pay for what you are selling. As demonstrated in the example above, the audience they were focused on had a desire for what they were selling, but only at a deep discount. This is an audience, but not your best audience.
Talks to others just like them. This is where the social part comes into play. In order to leverage the best word of mouth possible, your best customer will be one that can help you spread the word. So, if you have several potential audiences or customer mindsets who meet requirement #1 and #2, you should look for an audience who comes together and shares experiences regularly. If they love how you help them, they'll let others know.
As Peter Drucker famously said:
The aim of marketing is to know and understand the customer so well the product or service fits (them) and sells itself.
Of course, this is only the first step in understanding that audience. You need to take the time to get to know them. And, btw, demographics won't tell you what you need to know about this audience. If you think "millennials" is an audience or a customer group, you have a long way to go when it comes to learning how to research (good thing I'm working on a Researching Audiences Series, right? ;) ).
However, realizing that not all audiences are created equal is key. Unless you have infinite budgets, time and resources, the key to building a winning strategy will be in really understanding YOUR BEST CUSTOMER.