5 Steps for Discovering Your Ideal Customer and 6 Steps for Defining Your Niche Market
Discovering Your Ideal Customer and Your Niche Market
One of the most essential elements of running a successful online business is developing a detailed profile of the ideal customer. Finding and serving a perfect customer when you first start your business will save you months of wandering in the dark, looking for a paying market. The following five steps will put you on the right path for discovering your target customer.
Start with the Smallest Market Possible
You have to locate a group of customers that believe what you have to offer is unique. When you are first getting started, you will have very few resources to work with to get your name out there. Your key to initial success is to find a very narrow group and create raving fans out of them. Once you start to gain traction in your market, you can expand your reach.
Create an Initial Value Hypothesis
To continue to move forward, you have to stay in test and refine mode. That is why you must create a "why us" value proposition and use that as your hypothesis. Too many people get caught up in trying to execute their business plan when the market doesn’t care. The only thing that matters is what you discover and apply outside your office.
Gain Perspective in Discovery Test Sessions
The key to making and affirming your initial assumptions is to set-up discovery test sessions with your prospects. You can join industry or trade groups or offer free samples to those who are willing to provide you feedback. It is vital that you start talking to prospects about what they need, what they think, what works and what doesn't. This is how you evolve your business.
Create an Ideal Customer Sketch
Some of the information that you need to create your ideal customer sketch will be commonly understood, like demographics, but much of the data will be discovered in your test sessions and additional research. Now is the time to identify and define everything you can about your ideal target group.
Strategy Model Components
Now you need to apply this new ideal customer sketch to other elements of your business strategy. Consider how it might impact your offerings, your revenue streams, your pricing, and your distribution channels. You will also need to consider how you can reach this particular market and what resources you'll need to have an impact on the market.
Understanding your ideal customer will allow you develop the right products and the right price. Knowing what your customers need and want can help you build a successful business.
You’ve come up with a great new idea for a business, but before you can get started, you need to figure out who your market is. The more narrowly you can define your market, the better. This is known as finding a niche and is the key to your success. Building a good niche involves following a six-step process.
Step 1: Make a Wish List
You need to decide who you want to do business with, being as specific as you can. Identify the geographic range and the kinds of customers you want to target. You have to recognize that you won't be able to do business with everyone. If you try, you'll only risk confusing your customers and becoming exhausted.
Step 2: Focus
You need to clarify what products or services you want to sell. You can use these techniques to help you begin the process.
• Make a list of the things that you do best.
• List your achievements.
• Identify the valuable lessons you've learned in life.
• Look for patterns that reveal your approach to problems.
The niche you chose should arise naturally from your experiences and interests.
Step 3: Describe Your Customer’s Worldview
When you can look at the world from your prospects views, you can better identify their wants and needs. The best way for you to do this is to talk with your prospective customers and work to identify their primary concerns.
Step 4: Synthesize
By this step, your niche should be starting to take shape as your ideas, combined with what your potential customers' needs and wants. A good niche will have the following five qualities.
• It coincides with your long-term vision.
• Your customers want it.
• It’s carefully planned.
• It’s one-of-a-kind.
• It can evolve.
Step 5: Evaluate
Now is the time for you to evaluate your proposed product or service against the previous five criteria listed in step four. Perhaps you'll realize that the niche you've chosen requires you to travel more than you're ready to. If this is the case, then the niche doesn't fulfill all of the criteria and doesn't coincide with your long-term vision. At this point, you'll need to scrap it and move on.
Step 6: Test
When you finally have a niche that meets all the criteria, you’ll want to test it in the market. Give your customers a chance to buy your product or service by offering samples, like a sample of your newsletter, or a free mini-seminar.
Once you’ve successfully tested your ideas, it’s time to get started with your business. If you did your due diligence, entering the market should be a calculated risk that will hopefully pay off.