Ask many small business owners who their target audience is and they will say ‘everyone’.What this often means is that they really don’t know. Defining your audience is an important thing to do in order to grow your business – and one of the most effective ways to do this is to create an Ideal Customer Profile.
Creating Your Ideal Customer Profile
An Ideal Customer Profile (ICP) is a description of the kind of customer who values your product or service, buys it because they value it and is most likely to continue buying from you in the future.
In order to create your ICP, you need to sit down with your sales records and any analytical tools you can get your hands on and analyse the demographic, geographic, behavioural and psychographic characteristics of your best customers.
Questions to ask yourself include:
- What are their demographics – where they live, their age, gender, income, marital status etc.
- What are their psychological factors – their predominant personality traits and what are their preferences, needs, problems and goals
- What are their purchasing habits – where they shop, when they shop and what other products they shop for.
- Where do they get their information – where and when they access their media (i.e. via mobile devices, television, newspapers etc).
Once you have a detailed picture of your ideal customer’s ‘who, what, when and where’, you can start focusing your marketing more directly towards them.
Once you know where they get their media, you can start promoting yourself in that media. Then once you know what other products they buy, you can refine or expand your product range to cater towards more of their needs.
Your Ideal Customer Profile can provide a blueprint for every aspect of your business, from your company logo to the music you play in your store. Everything can be designed to attract and retain your ideal customer.
What to Do With Customers Outside Your Profile
The creation of an Ideal Customer Profile will not only pinpoint who your best customers are, it will also show you who your worst customers are and once you know this, you can start weeding them out and leaving them behind.
Customers you don’t want to retain include:
- Time wasters – those who take up the greatest amount of your time and bring you the least amount of profit.
- Penny pinchers – those who don’t value what you do and are always trying to get something for nothing.
- Complainers – those for whom nothing is good enough and never will be.
These kinds of customers are not worth your time and your ICP can help you to better target your marketing to attract more of your ideal customers and subtly discourage the worst kind of customers from seeking your services.
Once you have a solid base of the kind of customers that you really want, you can set about expanding that base and your business along with it. As well as your marketing efforts, you can reach more of your ideal customers by :
- Networking – attending trade shows, industry events and business functions.
- Research – becoming an expert in your industry will help you to know what your ideal customers currently want and to predict likely future trends.
- Relationship building – building a following on social media will allow you to connect with your ideal customers on a more personal level.
- Referrals – asking for recommendations from your existing customers can bring in more ideal customers just like them.
Identifying your ideal customers and giving them what they want is a highly desirable outcome for any small business. It will allow you to run your business more cost-effectively, saving you money and time on marketing, customer service and even accounts receivable, as a satisfied customer is more likely to pay their bills on time. It’s a win-win situation and it can all be achieved simply by creating an accurate Ideal Customer Profile.
Bio: Jarrod Kagan:
Having practised at a major law firm before moving across to Probe Group (one of Australia’s most prominent business process outsourcing organisations), Jarrod Kagan has over 8 years’ experience in customer outsourcing solutions. With a specialised expertise in credit management and debt recovery, he now holds the position of Head of Business and Compliance and as a qualified Lawyer, his skill level and experience covers the technical aspects of credit management and debt recovery, including: best practice, compliance, legislation, strategic analysis and industry specific detail.