Last week in the first article of the five part series, "Getting your First 100 Customers," I wrote about the first step which is establishing what your business stands for. In this week's article, I focus on understanding your target market and connecting with your potential customers.
Once you have established the foundations of your business consisting of a brand story, mission statement, vision statement, core values, and brand identity, it’s time for you to get out there to find the right customers who your business will appeal to.
Your target audience is a group of potential customers who share similar characteristics, such as behavior, interests, and demographics. A good example could be male cyclists between the ages of 25 and 45, if you are Zwift. Identifying the target audience will help your business make decisions around how to attract customers, where to spend marketing dollars, how to build on current product and service offerings, as well as defining new products and services and investment strategy. Defining the buyer persoas (a detailed version of your ideal customer profile), target audience (a group of buyer personas), and target market (entire regions and industries where your offering will be desired), target market should be based on thorough research and analysis, as well as an exercise of empathy and community building. It’s not just a hunch or a gut feeling (even though gut feelings should not be discarded either! Do keep them and lean into them BUT also conduct research and analysis to validate and expand on them, or confute them for that matter!)
There are four important steps to understanding your potential customers, that, when mastered, can ensure that you build a solid connection to your customer base.
1. UNDERSTAND YOUR CUSTOMERS NEEDS AND PAIN POINTS
Last week’s article started off by looking into the brand story concept. The story of a start-up often starts off with the founder(s) identifying – often by experiencing themselves –- a pain point / a specific need that is not being fulfilled by what is already available in the market. The founder(s) go searching for a solution to their problem / pain point. They are, however, stuck, and hence develop a solution to the problem which becomes their service / product. Since this primary pain point is what triggers the business idea and starts off the product / service in the first place, assuming there are other people who have the same need, you are already winning - you are, yourself, your own customer!
Now, let's think back to the story of Taskrabbit from last week's article - Leah Solivan would have paid for a tasker to go get dogfood for her dog, Kobe (need) because she had a different commitment across town and it was cold and snowy outside (pain points). But remember the assumption that there are other people who have the same need and pain point – people who are stretched for time and don’t want to be running an errand in the middle of the cold winter – those people will constitute the core part of your target audience. There might also be other people with a different pain point / need that also can be solved by your product and service. An example could be using a tasker to drill holes to hang paintings on your walls in your house. The need, in this case, might be the actual skillset (maybe this type of customer doesn’t know how to use a drill) and the pain point might be the inability to find someone affordable, e.g. a student with an interest in some extra cash, who can do the job as opposed to a full-on carpenter who would not be interested in such a small job and would be more expensive.
The people who constitute a target audience might also have other needs and pain points you might be able to expand your product and service offerings for. In the case of Airbnb, for instance, the people who were renting Airbnbs were also in the market for tour guides who knew the city well and could provide an authentic experience. Understanding that, Airbnb launched the Experiences product. To be able to understand the needs and pain points, it’s important to chat to people to validate that there is the need in the market for what you hypothesize to be the need as well as to understand the depth and peripheries of the need. Conducting qualitative research, such as surveys, focus groups, interviews to uncover the nature of your potential market’s pain points is the most well-known methodology in understanding customer needs. Assuming you have web presence, it’s also useful to use data and analytics tools and web surveys, as well as engaging with customers through feedback forms, online polls, fun contests can be useful ways to gather information on customer problems you can and would like to solve for. You might also use keyword data to analyze how people are searching for your product / services. E.g. if people are searching for ‘looking for someone to build my IKEA cabinet’, they are telling you their need (assembling IKEA furniture) and pain point (lack of time / skillset / will / patience to assemble IKEA furniture)
Some questions you might ask to pin down customer needs and pain points are:
What are your current challenges with …. e.g. the current TV offering (if you are Netflix)?
What frustrates you about ….. e.g. the way people watch TV these days?
What are your unmet wants, needs, hopes and dreams?
How do you currently solve the problem of …?
How do you currently fulfill the … need?
What happens when you fail to solve the … problem?
What is currently missing?
What are your priorities when it comes to ….?
What would make things easier and more convenient for you in the …. space?
What would you be willing to do / pay for such a product / service?
What is your dream set-up / product / service?
What would be the personal win for you if you were to implement a solution to this challenge?
How would you feel if you were able to solve the …. problem / fulfill the need with …… (describe what you have in mind)
2. UNDERSTAND YOUR CUSTOMERS LIFESTYLES AND LIFE PHILOSOPHIES
After the needs / problems conversation, it’s time to understand more about the customers themselves. Who are they and how do they live their lives? What else are they engaged with other than what your business is seeking to solve for? Getting to know the persona(s) who need and will, therefore, be interested in your offerings will help you empathize with them, tune into their life choices and what they care about not only to be able to create a solid offering for them but also to build a community around your business.
It’s advised that you start off with simple generic demographics to define your customer profile. Demographics are quantifiable pieces of information about your target audience, such as gender, age, profession, annual income, marital status and ethnic background.
Next, you can dig into a more emotional level with psychographics comprised of personality traits, attitudes, lifestyles, life objectives, values, philosophies, fears, and beliefs of your target audience. Psychographics help you understand the inspirations and motivations of your customer base and what appeals to them about your business.
At a foundational level, a Customer Profile (see sample template here in Leadrise Customer Profile worksheet) exercise will help you identify these characteristics.
Another well-known and more comprehensive tool is one called the Customer Journey Map.
A Customer Journey Map maps the story of your target customer’s experience, from initiating contact with your products or services to staying engaged all the way to long-term loyalty. (See templates here in Leadrise Customer Journey Map Templates)
Let’s go through a sample exercise together:
Start by choosing a customer, give them a name, say Emily, you might also give them an avatar.
Start with Emily’s demographics profile.
How old is Emily?
What gender is she?
What does she do for a living?
How much does she earn?
Where does she live?
What is her marital status?
Where is she from?
What languages does she speak?
What schools did she go to?
Then, think about a day in the life of Emily:
What time does she wake up?
What does she do when she first wakes up?
Then what?
What time does she get to work or her first activity?
When does she work out?
What does she do after work?
What time does she go to bed?
What does she do before she goes to bed?
You might do a few separate day profiles for e.g. weekdays and weekends.
Then jot down Emily’s values and causes she cares about and is interested in.
What does Emily read about?
What does she think about?
What does she worry about?
What gets her excited?
What are her core values?
What does she fear?
What does she love?
What does she care about?
What keeps her awake at night?
What are her goals and future aspirations?
What makes her tick?
What causes is she interested in?
At first read, you might think,"Why should I care about Emily’s values and fears if I am selling a toothbrush unless they are related to toothbrushing?" While that question makes sense, to really be able to build a bond with your customers and to meet customers where they are mentally and philosophically (where you believe your values and philosophies align naturally), it’s important that you get to know them as a whole, as opposed to only be interested in their market awareness, intent,and purchase behaviors. If you find that your target audience is worried about the environment and is interested in sustainability and climate action, for example, and that naturally happens to align with your founders’ and business’ values, you might look into building a community around environmental protection or you might decide to switch to sustainable packaging and market your practices so your consumers know to choose you over a competitor on the basis that you align to their values and preferences.
Another way to dig deeper into customer lifestyle preferences is to zoom into web analytics to see which social media outlets, industry blogs and professional forums your site / social media traffic comes from. Then, apply this information to your buyer personas so you can find out where and when to reach them more effectively.
3. UNDERSTAND YOUR CUSTOMERS' WHEREABOUTS
Having a general idea of your customers’ whereabouts by mapping their coordinates - not in a creepy, surveillance-y way but in an intellectually curious and interested to get to know them way - will help you understand their life journeys and touchpoints. If you are selling durable water bottles for example, and you realize your customer base loves yoga and go to yoga studios in Manhattan after work and before they go back home to Brooklyn, you might decide to collaborate with yoga studios in Manhattan.
Ask them these questions:
Whereabouts do they live?
Where do they work? (geographically)
Where do they travel to?
Where do they play / party at?
What kinds of shops and in which locations do they shop at?
Where do they do sports / work out?
In addition to the general map of physical locations, pinning down your customers’ digital footprint is essential.
Which sites do they visit?
What kind of videos do they watch?
Where (electronically) do they shop?
Where (electronically) do they play / party at?
Where (electronically) do they do sports / work out?
where do they congregate online, such as industry associations, conferences, communities and forums, and specialized directories.
Jot down the answers to these questions and add them to your customer journey map.
4. UNDERSTAND YOUR COMPETITORS AND COMPLEMENTORS
Studying the industry as a whole as well as other competitors in the wider context (e.g. in the case of Taskrabbit, shared economy - and not carpentry - is the industry, where carpenters may very well be included in the competition knowing how popular IKEA furniture assembly ended up becoming for the service) will be critical to what else your customers buy as well as what and why other people who are in your target audience buy. E.g. Hellofresh’s customer base are most likely also interested in food delivery from restaurants. Hellofresh, therefore, also competes with Ubereats and Doordash, as well as the likes of Blue Apron.
As important as competitive analysis is, it is as important to find your complementors and study their business models. For example, if you are Ryan Air, Budget Car Rentals are your complementor. The people who fly to other destinations often also rent cars. Think about what lateral businesses to yours there are and who their customer base is.
You might ask these questions:
Competitors:
What are other people out there doing that is similar to your business?
What are they doing well?
What are they not solving for?
What do your customers like and dislike about them?
How are your product and service differentiated?
How do your competitors connect with the target audience?
Complementors:
What are lateral businesses complementary to yours?
Who are their target audience?
How can you collaborate with them?
How can you leverage their existing customer base to appeal to and attract them?
What kind of partnership would they be interested in?
Congratulations on understanding your potential customers! Next week, I will be back with a piece about nailing your products - stay tuned!
Connect with me at leadrisecoaching@gmail.com if you have any questions / comments / experiences you would like to share on getting your first 100 customers!
#first100customers #earlyadopters #startups #entrepreneurship #targetmarket #targetaudience #customerjourneymap #customerprofile #competitiveanalysis